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].