Core Viewpoint - Liu Shaoyong, a prominent figure in China's civil aviation industry, has been investigated for serious violations of discipline and law, raising concerns about the future of China Eastern Airlines and the broader aviation sector [2][3]. Group 1: Background of Liu Shaoyong - Liu Shaoyong, born in 1958, has a long career in civil aviation, having held various significant positions including General Manager of China Eastern Airlines and China Southern Airlines [4][5]. - He is known for leading several airlines out of financial difficulties, earning the nickname "firefighter" of the aviation industry [3][6]. Group 2: Achievements and Challenges - Under Liu's leadership, China Eastern Airlines turned a profit within a year after he took over in 2008, following a significant loss of 13.93 billion yuan in that year [6]. - The airline's net profit soared to 5.38 billion yuan in 2010, showcasing Liu's effective management strategies [6]. - However, since 2020, the global aviation industry has faced severe challenges due to the pandemic, with China Eastern Airlines accumulating losses exceeding 70 billion yuan over the past five years [8]. Group 3: Recent Developments - In the first quarter of this year, China Eastern Airlines reported revenue of 33.41 billion yuan, a year-on-year increase of 0.65%, but also a net loss of 999.5 million yuan, which is a 23.91% increase in losses compared to the previous year [9].

Core Viewpoint - Liu Shaoyong, the former chairman of China Eastern Airlines Group, is under investigation for serious violations of discipline and law, raising concerns in the aviation industry [2][3]. Group 1: Background of Liu Shaoyong - Liu Shaoyong, born in 1958, has a long history in the civil aviation industry, having held various significant positions including general manager of China Eastern Airlines and China Southern Airlines [4]. - He is recognized for his ability to turn around struggling airlines, earning the nickname "firefighter" in the aviation sector [3][5]. Group 2: Achievements and Challenges - Under Liu's leadership, China Eastern Airlines returned to profitability within a year after he took over in 2008, following a significant loss of 13.93 billion yuan in 2008 [5]. - The company achieved a net profit of 7.12 billion yuan in 2009 and 5.38 billion yuan in 2010, marking a significant recovery [5]. - However, since 2020, the global aviation industry has faced severe challenges due to the pandemic, with China Eastern Airlines reporting cumulative losses exceeding 70 billion yuan over the past five years [5][6]. Group 3: Recent Developments - In the first quarter of this year, China Eastern Airlines reported revenue of 33.41 billion yuan, a year-on-year increase of 0.65%, but also a net loss of 999.5 million yuan, which is a 23.91% increase in losses compared to the previous year [6].

Summary of Eastern Airlines Logistics Conference Call Company Overview - Eastern Airlines Logistics is a pioneer in the mixed ownership reform of civil aviation, with a diversified shareholding structure: Eastern Airlines Group holds 40.5%, Legend Holdings 11.3%, and an employee shareholding platform 6.3% [2][5] - The company’s business includes air express, comprehensive logistics, and ground integrated services, with comprehensive logistics now being the primary revenue source, surpassing air express [2] Financial Performance - In 2024, the company achieved revenue of 24.1 billion yuan, a year-on-year increase of 17%, and a net profit of 2.7 billion yuan, up 8% [2][10] - For Q1 2025, revenue was 5.5 billion yuan, a 5% increase year-on-year, but net profit decreased by 7% due to aircraft disposal impacts [2][10] - The company has a dividend yield of 5.2%, with a total dividend payout of 1.07 billion yuan in 2024, representing 40% of net profit [10] Business Segments - **Air Express**: Relies on 15 B777 freighters and passenger aircraft bellyhold resources, covering over 160 countries and regions [2][6] - **Comprehensive Logistics**: Revenue reached 12.5 billion yuan in 2024, a 37% increase, accounting for 52% of total revenue. The fastest-growing segments are cross-border e-commerce (71% CAGR) and direct-to-origin services [2][16] - **Ground Integrated Services**: Contributes stable revenue, with a consistent income of over 2.2 billion yuan, accounting for about 11% of total revenue [7] Market Dynamics - The logistics industry is experiencing tight supply and demand, with limited supply of wide-body freighters and double-digit growth in demand [14][15] - Despite potential impacts from U.S. tariff policy changes, growth in European and Asia-Pacific markets is expected to compensate for any declines in U.S. routes [12][15] Future Outlook - The company anticipates steady revenue growth from 2025 to 2027, with projected revenues of 26 billion yuan, 28.1 billion yuan, and 29.6 billion yuan respectively [20] - Net profit forecasts for the same period are 2.4 billion yuan, 2.7 billion yuan, and 2.9 billion yuan, with a low PE valuation of 8.5 times for 2025 [20] - The company plans to maintain a dividend payout ratio between 30% and 50% [11] Valuation - Eastern Airlines Logistics is currently undervalued with a dynamic PE of 8.5 times for 2025, below the industry average of 12 times [3] - The target price is set at 15.2 yuan, with a buy rating based on the company's growth potential and stable dividend returns [20] Additional Insights - The company has a strong market position in Shanghai, with a market share of over 50% at both Pudong and Hongqiao airports [19] - Future plans include the construction of new cargo stations and smart logistics facilities to increase capacity by approximately 300,000 tons [19]