Investment Rating - The report maintains a "Recommendation" rating for the company, indicating an expected outperformance of 10%-20% relative to the benchmark index over the next six months [22]. Core Views - The company reported a 21.55% year-on-year increase in net profit attributable to shareholders for the first half of 2025, with total revenue reaching 13.969 billion yuan, a growth of 8.08% [2]. - The report highlights the impact of new high-speed rail lines on passenger traffic and revenue, with a mixed performance across different segments of the passenger business [3]. - The company is viewed as a potential asset with a price-to-book (PB) ratio below 1, suggesting room for growth, particularly with ongoing upgrades and new service offerings [8]. Financial Performance Summary - For the first half of 2025, the company achieved a gross profit margin of 10.41%, a slight decrease of 0.24 percentage points year-on-year, while the expense ratio increased by 0.17 percentage points to 0.95% [2]. - The passenger revenue for the first half of 2025 was 5.616 billion yuan, up 2.77% year-on-year, with significant growth in through train and long-distance train revenues [3]. - The freight revenue increased by 6.6% year-on-year to 842 million yuan, driven by a rise in total cargo volume [8]. Earnings Forecast - The earnings forecast for 2025-2027 has been adjusted, with expected net profits of 1.3 billion yuan in 2025, 1.386 billion yuan in 2026, and 1.48 billion yuan in 2027, corresponding to earnings per share (EPS) of 0.18, 0.20, and 0.21 yuan respectively [4][8]. - The report anticipates a price target of 4.33 yuan, representing a 30% upside from the current price of 3.33 yuan [4].

Core Viewpoint - Morgan Stanley has set a target price of HKD 10.8 for Cathay Pacific Airways (00293) and maintains a "market perform" rating, highlighting uncertainties in both passenger and cargo operations while emphasizing management's commitment to restoring capacity and optimizing network and cost efficiency to maximize profitability [1] Group 1: Passenger Business - Management indicated that the demand for new passenger routes will take 12 to 24 months to mature [1] - The company is focused on restoring capacity and optimizing its network to enhance profitability [1] Group 2: Cargo Business - The cargo business is expected to remain strong in the first half of 2025 due to initial demand and the company's flexibility in adjusting routes based on demand dynamics [1] - Despite the current strength, the cargo segment still faces uncertainties [1] Group 3: Dividend Policy - The company maintains a dividend payout ratio of 50% [1]

Core Viewpoint - Morgan Stanley has set a target price of HKD 10.8 for Cathay Pacific Airways (00293) and assigned a "Market Perform" rating, highlighting uncertainties in both passenger and cargo operations while emphasizing management's commitment to restoring capacity and improving cost efficiency to maximize profitability [1] Group 1: Passenger Business - Management indicated that the demand for new passenger routes will take 12-24 months to mature [1] - The company is focused on optimizing its network and improving cost efficiency to enhance profitability [1] Group 2: Cargo Business - The cargo business has shown strength in the first half of 2025 due to initial demand and the company's flexibility in adjusting routes based on dynamic demand [1] - Despite the current strength, the cargo segment still faces uncertainties [1] Group 3: Dividend Policy - The company has maintained a dividend payout ratio of 50% [1]

Core Viewpoint - FedEx reported better-than-expected Q4 results for FY2025, achieving its structural cost reduction target of $40 billion ahead of schedule and plans to cut an additional $1 billion in FY2026 to enhance profitability [1][5]. Financial Performance - For Q4 FY2025, FedEx's adjusted earnings per share (EPS) reached $6.07, surpassing analyst expectations of $5.84; revenue was $22.22 billion, exceeding the forecast of $21.79 billion, and showing slight growth from $22.1 billion in the same quarter last year [4]. - The net profit for the quarter was $1.65 billion, translating to an EPS of $6.88, significantly up from $1.47 billion ($5.94 EPS) in Q4 FY2024 [4]. - For the entire FY2025, FedEx achieved total revenue of $87.9 billion, slightly above the $87.7 billion recorded in FY2024 [5]. Cost Management and Strategic Initiatives - FedEx initiated a cost control transformation plan named "DRIVE" in FY2023, aimed at enhancing profitability and streamlining operations, successfully saving $40 billion by the end of FY2025 [5]. - The company plans to continue its cost reduction strategy in FY2026, targeting an additional $1 billion in savings [5]. - Capital expenditures for FY2025 were $4.1 billion, a 22% decrease from $5.2 billion in FY2024, marking the lowest capital expenditure as a percentage of revenue in history [5]. Market Outlook and Challenges - Despite strong financial results, FedEx's Q1 FY2026 earnings guidance was slightly below market expectations, with projected revenue growth of 0% to 2% and adjusted EPS between $3.40 and $4.00, lower than the anticipated $4.06 [6]. - The international export business is expected to face challenges due to unfavorable trade policies, particularly affecting revenue by approximately $170 million, primarily from changes in the "de minimis" policy impacting low-value goods exports from China [6]. - Following the earnings guidance, FedEx's stock price fell about 5% in after-hours trading, with a year-to-date decline of over 18% [6]. Business Restructuring - FedEx announced plans to spin off its Freight business into two independent publicly traded companies, aiming to streamline its business structure and focus on core express and ground logistics networks, with completion expected within the next 18 months [6].

Investment Rating - The investment rating for the company is "Buy" and is maintained [1] Core Views - The company continues to narrow its losses and is awaiting a recovery in passenger transport [4] - In 2024, the company reported an operating revenue of 166.7 billion yuan, a year-on-year increase of 18.1%, with a net profit attributable to shareholders of -240 million yuan, significantly reducing losses [4] - The passenger transport business shows signs of recovery, with a 21.7% increase in capacity and a 32.8% increase in passenger turnover, totaling 155 million passengers, a year-on-year growth of 23.8% [5] - Cargo performance remains strong, with cargo revenue reaching 7.41 billion yuan, a year-on-year increase of 78.0% [5] - The company expects continued growth in passenger transport in 2025, with projected revenues of 173.5 billion yuan, 185.2 billion yuan, and 196.9 billion yuan for 2025-2027, representing year-on-year growth rates of 4.1%, 6.7%, and 6.3% respectively [7] Summary by Sections Company Overview - Latest closing price: 7.59 yuan - Total shares: 1.7448 billion, circulating shares: 1.1638 billion - Total market value: 132.4 billion yuan, circulating market value: 88.3 billion yuan - Asset-liability ratio: 88.2% [3] Financial Performance - In 2024, the company’s operating revenue was 166.7 billion yuan, with a net profit of -240 million yuan, indicating a significant reduction in losses [4] - The fourth quarter revenue was 38.55 billion yuan, a year-on-year increase of 8.2%, with a net profit of -1.6 billion yuan [4] - The company’s oil costs were 53.72 billion yuan, a year-on-year increase of 15%, while non-oil costs reached 104.47 billion yuan, a 19.7% increase [6] Future Projections - The company forecasts net profits of 3.61 billion yuan, 7.89 billion yuan, and 10.65 billion yuan for 2025-2027, with significant growth rates of 118.4% and 34.9% in subsequent years [7] - The expected earnings per share (EPS) for 2025, 2026, and 2027 are 0.22 yuan, 0.47 yuan, and 0.64 yuan respectively [9]