Group 1 - Cathay Pacific Airways (00293) experienced a decline of over 3%, with a significant drop of more than 9% the previous day, currently trading at HKD 10.49 with a transaction volume of HKD 162 million [1] - The company reported a mid-year performance for 2025, with total revenue of HKD 54.309 billion, representing a year-on-year increase of 9.5%, and a net profit attributable to shareholders of HKD 3.651 billion, up 1.1% [1] - The interim dividend declared is HKD 0.20 per share [1] Group 2 - Cathay Pacific announced the exercise of a purchase option under a 2013 subscription agreement to acquire 14 Boeing 777-9 aircraft, with a basic price of approximately USD 8.1 billion, equivalent to about HKD 63.2 billion, expecting a lower actual cost due to significant discounts from the manufacturer [1] - Morgan Stanley's report indicated that the net profit attributable to ordinary shareholders for the first half of the year increased by 8.3% year-on-year, while operating profit remained flat at HKD 5.9 billion, below market expectations of HKD 6.6 billion [1] - The passenger yield was below expectations, primarily due to the normalization of long-haul route yields and increased competition on short-haul routes, despite strong demand in business class and an increase in passenger load factor year-on-year [1] Group 3 - The market generally anticipates a year-on-year decline in net profit for the full year of 2025, but Morgan Stanley believes the downside risk is limited [1] - The rating is "in line with the market," with a target price set at HKD 12.1 [1]

Core Viewpoint - Cathay Pacific Airways reported a significant drop in its stock price following the release of its latest earnings report, which showed mixed results despite a year-on-year revenue increase [1][4]. Financial Performance - For the six months ending June 30, 2025, Cathay Pacific Group reported revenues of HKD 54.309 billion, a year-on-year increase of 9.5% [1]. - The profit attributable to shareholders was HKD 3.651 billion, reflecting a modest growth of 1.1% compared to the previous year [1]. - The company declared an interim dividend of HKD 0.2 per share and reported unrestricted cash reserves of HKD 21.504 billion, up 12.7% year-on-year [1]. Passenger and Cargo Operations - Passenger revenue for the first half of 2025 reached HKD 34.208 billion, a 14.0% increase from the same period in 2024 [3]. - The number of passengers carried increased to 13.6 million, averaging 75,300 passengers per day, which is a 27.8% rise year-on-year [3]. - Cargo revenue was HKD 11.141 billion, up 2.2%, with an overall cargo tonnage increase of 11.4% to 801,000 tons [3]. Challenges and Strategic Moves - The company noted challenges due to tariff changes and uncertainties in the market, but highlighted the resilience of its cargo business [4]. - Cathay Pacific is expanding its business beyond aviation services, including ventures in payments, insurance, and lifestyle products [4]. Subsidiary Performance - Hong Kong Express, a wholly-owned low-cost subsidiary, reported passenger revenue of HKD 3.004 billion, remaining stable compared to the previous year [4]. - The airline carried 3.8 million passengers in the first half of 2025, a 33.5% increase year-on-year, although it faced a net loss of HKD 524 million due to external factors [4]. Aircraft Acquisition - The company announced the exercise of a purchase option under a 2013 agreement to acquire 14 Boeing 777-9 aircraft, with a basic price of approximately USD 8.1 billion (around HKD 63.2 billion) [6]. - The actual cost will be lower due to significant discounts from the manufacturer, with payments structured over five installments [6].

Core Viewpoint - Cathay Pacific Airways reported a mixed performance in its interim results, with a slight increase in profit but lower-than-expected passenger yield, leading to a significant drop in share price [1] Financial Performance - The company reported a net profit attributable to shareholders of HKD 3.651 billion for the six months ending June, a year-on-year increase of 1.1% [1] - Earnings per share were HKD 0.567, and the company declared an interim dividend of HKD 0.20 per share [1] - Total revenue reached HKD 54.309 billion, reflecting a year-on-year growth of 9.49% [1] Passenger and Cargo Revenue - Passenger revenue amounted to HKD 34.208 billion, an increase of 14%, with passenger traffic measured in revenue passenger kilometers rising by 30% [1] - The total number of passengers carried in the first half was 13.6 million, averaging 75,300 passengers per day, which is a 27.8% increase [1] - Cargo revenue was HKD 11.141 billion, showing a modest increase of 2.2% [1] Challenges Faced - Hong Kong Express recorded a pre-tax loss of HKD 524 million, compared to a profit of HKD 66 million in the same period last year, primarily due to passenger avoidance of traditional destinations like Japan following earthquake rumors and the time required for new routes to mature [1] - The group indicated that Hong Kong Express will continue to face short-term challenges, although there has been a slight recovery in flight bookings to Japan, they have not yet returned to normal levels [1] Market Reaction - Following the announcement, Cathay Pacific's shares experienced a significant drop of nearly 11%, trading at HKD 10.72, with trading volume increasing to HKD 410 million [1] - Morgan Stanley noted that the company's performance in the first half did not meet market expectations due to lower-than-expected passenger yield [1]

Core Viewpoint - JetBlue Airways reported second-quarter earnings with revenue of $2.18 billion, falling short of analysts' average expectation of $2.28 billion [1] - The adjusted loss per share was $0.16, compared to a profit of $0.08 per share in the same period last year, while analysts had anticipated a loss of $0.33 per share [1] Group 1 - The company’s president, Marty St. George, indicated that there has been an improvement in air travel demand as the quarter progressed, with significant increases in bookings made within 14 days prior to travel and during peak travel periods [1] - This positive momentum in bookings has continued into July [1] - The company expects a decline in revenue per available seat mile (RASM) of 2% to 6% for the third quarter [1]

Investment Rating - The investment rating for the company is "Buy" [8] Core Views - The company's 2024 net profit attributable to shareholders is expected to increase by 18% year-on-year, with a revenue of 22.1 billion yuan, reflecting a 10% year-on-year growth [1] - The company plans to introduce 17 new aircraft from 2025 to 2027, indicating confidence in future growth [2] - The company has announced a cash dividend of 0.19 yuan per share, representing a 45% cash dividend payout ratio, and plans to cancel 15 million repurchased shares [5] - The long-term outlook for the industry suggests a persistent supply constraint with steady demand growth, leading to a potential reversal in supply-demand dynamics and high profit elasticity [6] Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 22.1 billion yuan, with a net profit of 910 million yuan, marking an 18% increase year-on-year [1] - For Q1 2025, the company reported a revenue of 5.7 billion yuan, a slight increase of 0.05% year-on-year, with a net profit of 350 million yuan, down 8% year-on-year [1] Operational Metrics - The aircraft utilization rate improved to 11.5 hours per day in 2024, an increase of approximately 1.2 hours year-on-year [2] - The passenger load factor reached 84.6% in 2024, up 1.8 percentage points from 2023 [2] - The company plans to increase its fleet size to 127 aircraft by the end of 2024, with a net addition of 10 aircraft [2] Revenue and Cost Analysis - The unit revenue per available seat kilometer (ASK) decreased by 6% year-on-year to 0.394 yuan in 2024, primarily due to falling ticket prices [3] - The unit cost per ASK also decreased by 6% year-on-year to 0.339 yuan, driven by lower fuel prices [3] Expense Management - The company reduced its unit sales and management expenses by 5% and 16% year-on-year, respectively, in 2024 [4] - Financial expenses decreased to 1.46 billion yuan in 2024, down 0.4 billion yuan year-on-year, mainly due to lower leasing interest expenses [4] Future Profit Forecast - The company is projected to achieve net profits of 1.32 billion yuan, 1.76 billion yuan, and 2.31 billion yuan for 2025, 2026, and 2027, respectively [6]