Investment Rating - The investment rating for the company is "Buy" (maintained) [7] Core Views - The company is a leading private airline, and the aviation industry is approaching a supply-demand inflection point, with expectations for aircraft utilization recovery and rising ticket prices, leading to potential earnings exceeding expectations [1] - The aviation industry is currently in a "tight balance" phase, with high passenger load factors and seasonal ticket prices turning positive year-on-year, indicating resilience in the industry [1] - The company is expected to benefit significantly from the recovery in aircraft utilization and industry supply-demand improvements over the next three years, with substantial profit elasticity potential [1][3] Summary by Sections Company Performance - The company's aircraft utilization rate has been negatively impacted by engine maintenance issues, leading to a significant increase in unit non-fuel costs, which has temporarily affected earnings [1] - As of the first half of 2025, the company's aircraft utilization rate was 9.8 hours per day, down 0.6 hours year-on-year, with the A320 series utilization at 9.1 hours per day, a decline of 2.2 hours compared to the first half of 2024 [1] - The company expects substantial improvement in engine issues by the end of 2026, which will allow it to fully benefit from the industry's supply-demand recovery [1] Financial Projections - The company forecasts net profits of approximately 1.007 billion, 1.571 billion, and 2.294 billion yuan for 2025, 2026, and 2027 respectively, with a target market value of 45.9 billion yuan based on a 20x PE ratio for 2027 [5] - The company plans to increase dividends and share buybacks, reflecting confidence in its development, with a proposed dividend of 0.19 yuan per share for 2024 and a share buyback plan of 250 million to 500 million yuan [2] Market Expectations - The market anticipates that the recovery pace of the company's earnings may differ slightly from the industry, with the worst period already passed, and future earnings recovery rates and profit elasticity expected to exceed forecasts [3] - The company plans to introduce 5-6 new aircraft annually from 2027 to 2028, which will contribute to significant growth in effective capacity and earnings [3] Catalysts - Potential catalysts for the company include increases in volume and price, improved aircraft utilization, declining oil prices, and appreciation of the renminbi [4]