Investment Rating - The report maintains a "Recommended" rating for China National Airlines [5][6]. Core Views - In the first half of 2025, the company achieved revenue of 80.757 billion yuan, a year-on-year increase of 1.56%, and a net profit attributable to shareholders of -1.806 billion yuan, reducing losses by 35.11% compared to the same period last year [2]. - The company turned a profit in Q2 with a net profit of 238 million yuan, following a loss of 2.044 billion yuan in Q1 [2]. - Passenger revenue decreased slightly, but the decline was within expectations, attributed to rising fuel costs and an increase in the proportion of international routes [3]. - The introduction of the "Self-Discipline Agreement for Air Passenger Transport" aims to promote high-quality development in the industry and stabilize ticket prices [4]. Financial Performance - The company’s passenger revenue for the first half of 2025 was 73.196 billion yuan, with a slight increase of 0.59 million yuan year-on-year [3]. - The unit cost of ASK (Available Seat Kilometer) excluding fuel increased to 0.304 yuan, while the unit fuel cost decreased from 0.158 yuan to 0.137 yuan, contributing to the profit recovery in Q2 [3]. - The company plans to introduce 47 aircraft and retire 18 in 2025, indicating cautious growth in fleet size [4]. Profit Forecast - The forecasted net profits for 2025, 2026, and 2027 are 1.88 billion yuan, 6.31 billion yuan, and 7.93 billion yuan, respectively, with corresponding EPS of 0.11, 0.36, and 0.45 yuan [5][11].