Investment Rating - The report maintains a "Recommended" investment rating for China Eastern Airlines (600115) [1] Core Views - In Q3 2025, the company achieved a net profit attributable to shareholders of 3.53 billion yuan, representing a year-on-year increase of 34% [1] - The company's capacity growth rate is leading in the industry, contributing to better-than-expected performance [1] - The report anticipates continued profitability for the airline, supported by limited supply growth in the industry and signs of recovery in business travel demand [8] Financial Performance Summary - **Revenue and Profitability**: - For the first three quarters of 2025, total revenue reached 106.41 billion yuan, a year-on-year increase of 3.7%, with a net profit of 2.1 billion yuan, marking a return to profitability [8] - In Q3 2025, revenue was 39.59 billion yuan, up 3.1% year-on-year, with a net profit of 3.53 billion yuan, up 34.4% year-on-year [8] - **Cost Analysis**: - Operating costs for Q3 2025 were 34.2 billion yuan, a year-on-year increase of 1.5%, with fuel costs decreasing by 7.4% to 11.3 billion yuan [2][8] - The cost per seat kilometer was 0.403 yuan, down 4.3% year-on-year, indicating improved cost efficiency [2][8] - **Key Financial Metrics**: - Projected total revenue for 2025 is 139.38 billion yuan, with a net profit forecast of 781 million yuan, reflecting a significant recovery [4] - Earnings per share (EPS) are expected to improve from -0.19 yuan in 2024 to 0.04 yuan in 2025, and further to 0.27 yuan in 2026 [4] Market Position and Outlook - The company is expected to benefit from a tightening of flight schedules in the new season and a positive trend in ticket prices due to recovering business travel demand [8] - The target price for the stock is set at 5.89 yuan, indicating a potential upside of 23% from the current price of 4.80 yuan [4][8]

Core Viewpoint - China Eastern Airlines reported a revenue increase of 4.09% year-on-year for the first half of 2025, with total revenue reaching 66.822 billion yuan, while the net profit attributable to shareholders improved by 48.3% to -1.431 billion yuan [1] Financial Performance - Total revenue for the second quarter of 2025 was 33.416 billion yuan, up 7.76% year-on-year [1] - The gross profit margin increased by 28.01% to 3.47%, while the net profit margin improved by 50.65% to -2.38% [1] - Total expenses (selling, administrative, and financial) amounted to 7.144 billion yuan, accounting for 10.69% of revenue, a decrease of 8.61% year-on-year [1] - Earnings per share improved by 50% to -0.06 yuan, and operating cash flow per share increased by 17.06% to 0.56 yuan [1] Key Financial Metrics - The company’s short-term debt pressure increased, with a current ratio of 0.18 [1] - Cash and cash equivalents decreased by 4.02% to 3.699 billion yuan, while accounts receivable increased by 14.66% to 3.051 billion yuan [1] - Interest-bearing liabilities decreased by 7.89% to 117.076 billion yuan [1] Changes in Financial Items - Operating costs increased by 3.27% due to an increase in flight volume [3] - Financial expenses decreased by 26.89% due to measures taken to reduce interest expenses [3] - Investment income rose by 24.62% due to increased profits from joint ventures [3] - Cash flow from operating activities increased by 17.06% due to higher passenger transport volume [3] Business Model and Market Position - The company’s performance is primarily driven by marketing efforts, necessitating a thorough examination of the underlying drivers [5] - Historical data indicates a weak return on invested capital (ROIC) of 0.2% last year, with a median ROIC of 2.83% over the past decade [4] Fund Holdings - The largest fund holding China Eastern Airlines shares is the ICBC Convertible Bond Fund, with 57.9231 million shares [7] - Other notable funds include the GF Ruiyi Leading Mixed Fund and the Fortune China Tourism Theme ETF, which have adjusted their holdings [7]

Investment Rating - The investment rating for HNA Holding is "Accumulate" [5] Core Views - The company achieved a total revenue of 65.2 billion yuan in 2024, representing a year-on-year increase of 11%, while the net profit attributable to shareholders was -0.92 billion yuan, compared to a profit of 0.31 billion yuan in 2023 [1] - The company is expected to see a steady improvement in performance, with projected net profits of 1.57 billion yuan, 2.81 billion yuan, and 4.83 billion yuan for the years 2025 to 2027, respectively [5] Summary by Sections Financial Performance - In Q1 2025, the company reported a net profit of 0.27 billion yuan, a year-on-year decrease of 60% [1] - The total revenue for Q1 2025 was 17.6 billion yuan, showing a slight increase of 0.3% year-on-year [1] Operational Metrics - The daily aircraft utilization rate for 2024 increased by 1 hour to 9.3 hours, while the passenger load factor rose by 0.8 percentage points to approximately 83.5% [2] - The fleet size at the end of 2024 was 348 aircraft, with a net increase of 14 aircraft throughout the year [2] Revenue and Cost Analysis - The unit revenue per available seat kilometer (ASK) for 2024 was 0.440 yuan, down 6% year-on-year, while the unit revenue per revenue passenger kilometer (RPK) was 0.527 yuan, down 8% [3] - The unit operating cost per ASK for 2024 was 0.407 yuan, a decrease of 3% year-on-year, primarily due to a drop in fuel prices [3] Expense Overview - The financial expenses for 2024 were 5.2 billion yuan, a decrease of 3% year-on-year, mainly due to lower interest expenses and reduced foreign exchange losses [4] - The selling expense ratio for 2024 was 3.2%, an increase of 0.4 percentage points year-on-year [4] Profit Forecast - The company is expected to experience a reversal in supply-demand dynamics, leading to high profit elasticity in the medium to long term [5] - The projected earnings per share (EPS) for 2025 is 0.04 yuan, increasing to 0.11 yuan by 2027 [7]