Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was corrected from 25,456 to 205,456[1] - The company confirmed that there were no other changes to the content of the 2018 semi-annual report besides the correction[1] Disclosure and Announcement - The correction was disclosed on August 29, 2018, through various platforms including the Shanghai Stock Exchange website[1] - The announcement was made by the board of directors of China Southern Airlines on September 10, 2018[2]

Financial Performance - The company reported a significant increase in revenue, achieving a total of 50 billion yuan, representing a 15% year-over-year growth[1]. - Operating profit margin improved to 12%, compared to 10% in the same period last year, reflecting better cost management[1]. - Operating revenue for the first half of 2018 reached RMB 67,555 million, an increase of 11.98% compared to RMB 60,328 million in the same period of 2017[20]. - Net profit attributable to shareholders for the first half of 2018 was RMB 2,137 million, a decrease of 22.80% from RMB 2,768 million in the first half of 2017[20]. - Basic earnings per share for the first half of 2018 was RMB 0.21, down 25.00% from RMB 0.28 in the same period of 2017[22]. - The company anticipates a revenue growth of 12% for the next quarter, driven by increased travel demand and market expansion[1]. - The company's total revenue for the first half of 2018 was RMB 67,555 million, an increase of 11.98% year-on-year, with main operating revenue at RMB 66,351 million, up 11.86%[63]. - Passenger revenue reached RMB 60,386 million, reflecting a year-on-year growth of 12.61%, while cargo and mail revenue increased by 7.30% to RMB 4,499 million[65]. Passenger and Cargo Operations - Passenger traffic increased by 20%, with a total of 80 million passengers carried during the reporting period[1]. - The total passenger transportation volume reached 297 million, reflecting a year-on-year growth of 12.4%[45]. - The total number of passengers carried increased by 11.16% to 67,351.13 thousand in 2018 from 60,588.06 thousand in 2017[32]. - The total cargo and mail transported increased by 2.45% to 830.31 thousand tons in 2018 compared to 810.48 thousand tons in 2017[32]. - The company’s cargo revenue was RMB 4,499 million, representing a year-on-year growth of 7.3%[57]. Fleet and Capacity Expansion - The company plans to expand its fleet by adding 30 new aircraft in the next fiscal year, which is expected to enhance operational capacity[1]. - The fleet size at the end of June 2018 was 786 aircraft, with an average age of 6.7 years[40]. - The company introduced 42 aircraft during the reporting period, increasing the fleet size to 786 aircraft, a net increase of 32 aircraft[46]. - The company plans to deploy 250 aircraft at the new Beijing airport by 2025, aiming for over 900 flights per day[50]. Financial Position and Liabilities - Total assets as of June 30, 2018, amounted to RMB 229,118 million, reflecting a growth of 4.94% from RMB 218,329 million as of December 31, 2017[20]. - The company's total liabilities reached RMB 164,609 million, an increase of 5.41%, with current liabilities making up 49.84% of total liabilities[80]. - The debt-to-asset ratio as of June 30, 2018, was 71.84%, slightly up from 71.53% at the end of 2017[83]. - The company has unused bank credit facilities amounting to RMB 205,835 million, which can support future capital expenditures and working capital needs[83]. Cost Management and Financial Strategies - Operating costs for the first half of 2018 amounted to RMB 60,114 million, representing a year-on-year increase of 13.46%, primarily driven by a 25.83% rise in fuel costs[69]. - The company has implemented hedging strategies to manage interest rate and exchange rate risks associated with its financing activities[30]. - The company’s financial expenses surged by 143.25% to RMB 2,036 million, compared to RMB 837 million in the previous year[62]. - The company has a high asset-liability ratio, making it sensitive to interest rate fluctuations, which could affect net profit by RMB 537 million for every 100 basis points change in funding costs[116]. Compliance and Risk Management - The company remains committed to maintaining compliance with regulatory requirements and has outlined potential risks in its operational analysis[1]. - The company has maintained a good integrity status, with no reported violations during the reporting period[151]. - The company faces macroeconomic risks that could impact demand for air passenger and cargo transport, affecting overall business performance[107]. Environmental and Social Responsibility - The company has introduced 25 investment projects in the Moyu County, amounting to nearly 600 million RMB, creating job opportunities for 2,917 individuals[156]. - The company has implemented a comprehensive approach to poverty alleviation, combining development and support for those unable to escape poverty independently[159]. - The company engaged in carbon offset initiatives, helping passengers on specific flights to neutralize their carbon emissions[166]. - The company completed compliance with the EU carbon trading requirements for 2017, demonstrating commitment to environmental regulations[167]. Shareholder and Corporate Governance - The company has approved a cash dividend of RMB 0.1 per share, totaling RMB 1,008,817,327.2, based on a total share capital of 10,088,173,272 shares[128]. - The largest shareholder, China Southern Airlines Group, holds 4,039,228,665 shares, representing 40.04% of total shares[179]. - The company has not experienced any changes in its controlling shareholders or actual controllers during the reporting period[181]. - The company has not granted stock incentives to its directors, supervisors, or senior management during the reporting period[182].

Financial Performance - Operating revenue for the first quarter was RMB 34,101 million, reflecting a year-on-year growth of 10.10%[11] - Net profit attributable to shareholders was RMB 2,544 million, up 64.13% year-on-year[11] - The company transported 33.25 million passengers, a 9.79% increase compared to the same period last year[11] - Passenger turnover reached 61.857 billion passenger kilometers, growing by 10.76% year-on-year[11] - Basic earnings per share increased to RMB 0.25, representing a growth of 56.25%[5] - Net profit for Q1 2018 reached RMB 2,862 million, representing a 55.5% increase from RMB 1,840 million in Q1 2017[35] - Operating revenue for the current period reached RMB 23,431 million, an increase of 8.84% from RMB 21,527 million in the previous period[37] - Net profit for the current period was RMB 2,055 million, representing an 83.24% increase compared to RMB 1,122 million in the previous period[37] - Operating profit increased to RMB 2,476 million, up 91.24% from RMB 1,295 million in the previous period[37] - Total comprehensive income for the current period was RMB 2,081 million, compared to RMB 1,134 million in the previous period, marking an increase of 83.33%[38] Cash Flow and Investments - The net cash flow from operating activities was RMB 4,516 million, a significant increase of 60.20% year-on-year[5] - Cash inflow from operating activities totaled RMB 25,691 million, compared to RMB 22,591 million in the previous period, reflecting an increase of 9.3%[44] - Cash outflow from operating activities was RMB 21,552 million, an increase from RMB 20,559 million, marking a rise of 4.8%[44] - Cash flow from investing activities resulted in a net outflow of RMB 2,174 million, worsening from a net outflow of RMB 1,915 million year-over-year[44] - The company disposed of fixed assets and other long-term assets, generating cash inflow of RMB 460 million, up from RMB 231 million[44] - The company experienced a net cash outflow from financing activities of RMB 4,270 million, compared to a net outflow of RMB 1,984 million in the previous period[43] Assets and Liabilities - Total assets reached RMB 220,025 million, an increase of 0.78% compared to the end of the previous year[5] - The total current assets decreased from RMB 17,884 million to RMB 17,239 million, reflecting a decline of 3.61%[24] - The total non-current assets increased from RMB 200,445 million to RMB 202,786 million, showing a growth of 1.17%[25] - The total liabilities decreased from RMB 156,164 million to RMB 154,190 million, a reduction of 1.26%[26] - The total equity increased from RMB 62,165 million to RMB 65,835 million, reflecting a growth of 5.39%[26] - The company’s retained earnings increased from RMB 21,664 million to RMB 24,817 million, an increase of 14.92%[26] Cash and Cash Equivalents - The company’s cash and cash equivalents decreased from RMB 7,250 million to RMB 6,289 million, a decline of 13.24%[24] - Cash and cash equivalents decreased to RMB 3,285 million from RMB 4,716 million at the end of the previous year[28] - Cash and cash equivalents at the end of the period totaled RMB 6,185 million, an increase from RMB 5,096 million in the previous period[43] - The ending balance of cash and cash equivalents was RMB 3,200 million, slightly up from RMB 3,084 million year-over-year[45] Operating Costs and Expenses - Total operating costs for Q1 2018 were RMB 31,029 million, up 5.7% from RMB 29,356 million in Q1 2017[34] - Sales expenses increased slightly to RMB 1,120 million from RMB 1,078 million, reflecting a growth of 3.89%[37] - The company reported a decrease in financial expenses, showing a net financial income of RMB 607 million compared to an expense of RMB 493 million in the previous period[37] Aircraft Operations - The company operated a total of 767 aircraft during the first quarter[11]

Financial Performance - The company's operating revenue for 2017 was RMB 127,489 million, an increase of 11.05% compared to RMB 114,803 million in 2016[23]. - The net profit attributable to shareholders for 2017 was RMB 5,914 million, representing a growth of 16.97% from RMB 5,056 million in 2016[23]. - The basic earnings per share for 2017 was RMB 0.60, up 17.65% from RMB 0.51 in 2016[24]. - The total assets at the end of 2017 reached RMB 218,329 million, an increase of 8.91% from RMB 200,470 million at the end of 2016[23]. - The net cash flow from operating activities for 2017 was RMB 21,404 million, a decrease of 18.89% compared to RMB 26,390 million in 2016[23]. - The company's total equity attributable to shareholders at the end of 2017 was RMB 49,594 million, up 14.84% from RMB 43,187 million at the end of 2016[25]. - The company's debt-to-asset ratio was 71.53%, a decrease of 1.18 percentage points year-on-year[78]. - The total operating costs amounted to RMB 111,687 million, up RMB 15,319 million or 15.90% compared to the previous year[81]. - The net profit attributable to shareholders was RMB 5,914 million, an increase of RMB 858 million or 16.97% year-on-year[84]. - The total liabilities increased to RMB 156,164 million, up 7.14% from the beginning of the period[85]. Dividend Policy - The board proposed a cash dividend of RMB 0.1 per share for the year ending December 31, 2017, totaling approximately RMB 1,009 million based on 10,088,173,272 shares issued[4]. - The company plans to pay dividends to shareholders by August 31, 2018, pending approval at the annual general meeting[4]. - The company's cash dividend policy emphasizes a minimum of 30% of the average distributable profit over the past three years to be distributed in cash over the next three years[160]. - In 2017, the company achieved a net profit of RMB 4,920 million, with a remaining distributable profit of RMB 4,428 million after statutory reserve allocation[161]. - The company's dividend distribution policy aims to balance shareholder returns with the need for capital reinvestment for future growth[159]. Operational Strategy - The company aims to expand its market presence and enhance operational efficiency through strategic initiatives[5]. - The company continues to explore opportunities for mergers and acquisitions to strengthen its market position[5]. - The company is focused on developing new technologies and products to improve service offerings and customer experience[5]. - The company aims to build an international-scale network airline with a fleet of over 1,000 aircraft and an annual passenger volume of approximately 160 million by the end of the 13th Five-Year Plan[36]. - The company focuses on a "hub + point-to-point" operational model, balancing domestic and international markets to enhance overall network stability and development[36]. - The company has implemented a matrix management model to enhance resource coordination and efficiency, focusing on optimizing capacity and route management[51]. Market Position - In 2017, the company transported 126 million passengers, maintaining its position as the largest airline in China for 39 consecutive years, with fleet size and passenger volume ranking first in Asia and fourth globally[46]. - The company operates over 2,000 flights daily to more than 200 destinations across 40 countries and regions, providing over 300,000 seats[47]. - The international route proportion has rapidly increased, with significant expansion in Australia, Southeast Asia, Central Asia, and Europe and the US[36]. - The company has established a comprehensive route network along the "Belt and Road" initiative, operating 172 routes to 68 cities in 38 countries, with over 2,200 weekly flights and carrying over 15 million passengers annually[47]. - The company opened 61 international routes from Guangzhou, with a weekly flight volume exceeding 543 flights[74]. Challenges and Risks - The company faces challenges from fluctuating exchange rates, with the RMB appreciating by 6.1% against the USD in 2017, but potential depreciation pressures remain[54]. - Fuel costs are expected to rise due to a rebound in international oil prices, which will directly impact operational performance[55]. - The expansion of China's high-speed rail network, reaching 25,000 kilometers by the end of 2017, poses a competitive threat to air travel, particularly on routes under 800 kilometers[56]. - The company anticipates challenges from rising international oil prices and increased competition from high-speed rail[143]. - The company faces significant risks from macroeconomic policies, including credit, interest rates, and fuel surcharge pricing mechanisms, which could impact operational performance[150]. Governance and Compliance - The company has established a robust governance framework to manage risks and ensure compliance with regulatory requirements[6]. - The company has maintained a commitment to transparency and accuracy in its financial reporting, as affirmed by its management[7]. - The company received a standard unqualified audit report from KPMG Huazhen[7]. - The company has engaged KPMG Huazhen LLP for domestic financial reporting and internal control audits, with a remuneration of RMB 13.8 million[171]. - The company received a commitment from China Southern Airlines Group regarding a financial service framework agreement, ensuring that all financial activities will comply with relevant laws and regulations[166]. Social Responsibility - The company has committed RMB 1.53 million in funds and materials for poverty alleviation efforts in 2017, with an additional RMB 610 million from the group for targeted poverty alleviation initiatives[191]. - The company invested RMB 270 million to build a kindergarten and RMB 263.29 million for a primary school in impoverished areas, benefiting a total of 1,611 students[194]. - The company has implemented various poverty alleviation projects, focusing on industry development, education, and infrastructure improvements[192]. - The company has launched an e-commerce poverty alleviation initiative to address the sales issues of agricultural products in the Hotan region of Xinjiang[200]. - The initiative includes a dedicated section on the airline's e-commerce platform, Mingzhu Travel, for selling poverty alleviation products[200].

Financial Performance - Operating revenue for the first nine months rose by 10.93% to RMB 96,123 million year-on-year[6] - Net profit attributable to shareholders increased by 9.46% to RMB 7,050 million for the first nine months[6] - Basic earnings per share increased by 7.58% to RMB 0.71[6] - Net profit for the first three quarters reached RMB 8,210 million, a 9% increase compared to RMB 7,535 million in the same period last year[28] - The company reported a net profit attributable to shareholders of RMB 7,050 million for the first three quarters, compared to RMB 6,441 million in the same period last year, reflecting a growth of 9.5%[28] - Net profit for Q3 2017 was RMB 3,325 million, up 25.38% from RMB 2,652 million in Q3 2016[32] - Total comprehensive income for Q3 2017 was RMB 3,332 million, compared to RMB 2,677 million in Q3 2016, reflecting a 24.51% increase[33] Assets and Liabilities - Total assets increased by 5.42% to RMB 211,334 million compared to the end of the previous year[6] - The company’s net assets attributable to shareholders increased by 17.38% to RMB 50,686 million compared to the end of the previous year[6] - The company's total liabilities increased to RMB 147,827 million from RMB 145,753 million, indicating a slight rise in financial obligations[20] - The total liabilities increased to RMB 126,503 million, up from RMB 120,531 million at the beginning of the year, indicating a rise of approximately 5.5%[24] - Long-term borrowings increased significantly by 797.94% to RMB 9,599 million, reflecting new long-term loans taken during the reporting period[15] Cash Flow - Cash flow from operating activities decreased by 16.56% to RMB 17,163 million compared to the same period last year[6] - Cash flow from operating activities for the first nine months of 2017 was RMB 104,251 million, an increase from RMB 94,315 million in the same period last year[35] - Cash flow from investing activities showed a net outflow of RMB 5,016 million for the first nine months of 2017, improving from a net outflow of RMB 6,675 million in the previous year[36] - Cash flow from financing activities resulted in a net outflow of RMB 10,616 million for the first nine months of 2017, compared to a net outflow of RMB 14,843 million in the same period last year[36] - Net cash flow from operating activities decreased to 11,792 million, down from 16,381 million, reflecting a decline of about 28.5%[38] - Cash outflow from investing activities significantly increased to 7,678 million, compared to 2,885 million in the previous year, indicating a rise of approximately 166.5%[38] Shareholder Information - The number of shareholders reached 218,751 by the end of the reporting period[10] - The company completed the issuance of 270,606,272 H-shares to American Airlines at a price of HKD 5.74 per share, enhancing its capital structure[16] - The company plans to issue A-shares and H-shares to specific investors, including the parent company, to raise additional capital[16] Other Income and Expenses - Other income increased by 100% to RMB 1,695 million, attributed to government subsidies[14] - Financial expenses decreased by 76.42% to RMB 902 million due to the appreciation of RMB against USD[14] - Cash paid for taxes rose by 48.66% to RMB 3,208 million, primarily due to increased value-added tax, income tax, and customs duties[15] Investment Activities - Cash received from investments surged by 562.69% to RMB 1,723 million, mainly attributed to investments from American Airlines during the reporting period[15] - The net cash recovered from the disposal of fixed assets and other long-term assets increased by 146.68% to RMB 5,057 million compared to the same period last year, primarily due to the transfer of aircraft slots and recovery of aircraft prepayments by Xiamen Airlines[15]

Fleet and Operations - China Southern Airlines operates a fleet of 717 aircraft, making it the largest airline in terms of fleet size in Asia and the fourth largest in the world[2]. - The company is the first globally to operate both the Airbus A380 and Boeing 787 aircraft[2]. - The total fleet size at the end of the reporting period was 717 aircraft, with 703 passenger aircraft and 14 cargo aircraft[32]. - The company delivered 28 new aircraft during the reporting period, while 13 aircraft were retired[32]. - The total flight hours increased by 8.15% to 1,243.11 thousand hours in 2017 from 1,149.48 thousand hours in 2016[31]. - The total number of takeoffs increased by 5.55% to 489.19 thousand in 2017 compared to 463.48 thousand in 2016[31]. Financial Performance - Operating revenue for the first half of 2017 was RMB 60,319 million, an increase of 11.54% compared to RMB 54,078 million in the same period of 2016[18]. - Net profit attributable to shareholders for the first half of 2017 was RMB 2,768 million, a decrease of 11.62% from RMB 3,132 million in the first half of 2016[18]. - The net cash flow from operating activities for the first half of 2017 was RMB 8,971 million, down 6.18% from RMB 9,562 million in the same period of 2016[18]. - Basic earnings per share for the first half of 2017 was RMB 0.28, a decrease of 12.50% compared to RMB 0.32 in the first half of 2016[19]. - Total assets as of June 30, 2017, were RMB 203,718 million, an increase of 1.62% from RMB 200,461 million as of December 31, 2016[18]. - The net assets attributable to shareholders as of June 30, 2017, were RMB 45,076 million, up 4.39% from RMB 43,181 million as of December 31, 2016[18]. - Operating costs totaled RMB 52,976 million, an increase of RMB 8,711 million or 19.68% year-on-year, with fuel costs rising by 50.13% to RMB 15,402 million due to increasing international oil prices[63]. Risk Management and Compliance - The company has not experienced any non-operational fund occupation by controlling shareholders or related parties during the reporting period[10]. - There were no significant risks reported during the period, with detailed descriptions of potential risks provided in the report[10]. - The company has no major litigation, arbitration, or media inquiries during the reporting period[101]. - The company has not implemented any equity incentive plans during the reporting period[105]. - The company has no bankruptcy reorganization matters during the reporting period[104]. Strategic Initiatives - The company plans to enhance hub construction and improve operational efficiency in the second half of 2017, aiming for a better overall performance for the year[50]. - The company aims to enhance operational efficiency and service quality at its hubs, focusing on the Guangzhou, Beijing, and Urumqi international route hubs[52]. - The company plans to open new routes including Guangzhou-Kaohsiung, Shenzhen-Brisbane, and Shenzhen-Moscow in the second half of 2017, while increasing capacity on existing routes to New York, Los Angeles, Melbourne, and Christchurch[52]. - The company is enhancing its international route management, focusing on improving revenue quality and increasing the number of international routes[55]. - The company is committed to optimizing its marketing strategy, focusing on customer-centric approaches and improving international route profitability[55]. Customer Engagement and Digital Transformation - The company’s electronic direct sales revenue increased by 64.9% year-on-year, with mobile revenue growing by 30.8%[45]. - The membership scale reached 32.44 million, a year-on-year increase of 17.5%, while overall sales revenue from major customers grew by 26%[45]. - The company launched 204 features for the "Southern Airlines e-Travel" platform, with social media followers reaching 16.18 million, a year-on-year increase of 74.2%[48]. - The company is the first domestic airline to implement a facial recognition boarding system, enhancing customer experience[48]. Social Responsibility and Community Engagement - The company invested RMB 76.2063 million in a joint venture, acquiring a 70.5% stake in Guangzhou Nanlian Aviation Food Co., Ltd.[75]. - The company invested a total of RMB 554.18 million in poverty alleviation efforts, including RMB 268.16 million in infrastructure and RMB 80 million in industry poverty alleviation projects[134]. - The company provided financial assistance to 41 impoverished students, with a total investment of RMB 5.1 million for educational poverty alleviation[134]. - The company allocated RMB 200 million for emergency assistance to support individuals affected by severe illnesses and disasters in Xinjiang[132]. - The company constructed 4 wells in Liaoning Province to improve living conditions for impoverished communities[133]. Corporate Governance and Shareholder Information - The company held one shareholders' meeting during the reporting period, where nine proposals were approved, including the 2016 annual profit distribution plan, which distributed a cash dividend of RMB 0.1 per share[99]. - The company’s total shares remained unchanged at 9,817,567,000 as of June 30, 2017[140]. - The largest shareholder, China Southern Airlines Group, held 4,039,228,665 shares, representing 41.14% of the total shares[146]. - American Airlines Group Inc. holds 270,606,272 H-shares, accounting for approximately 2.76% of the total issued shares[150]. - The company did not experience any changes in its controlling shareholder or actual controller during the reporting period[149].

Financial Performance - Operating revenue for the period was RMB 30,969 million, representing a year-on-year increase of 10.58%[6] - Net profit attributable to shareholders of the listed company was RMB 1,550 million, a decrease of 42.44% compared to the same period last year[6] - Basic earnings per share decreased by 40.74% to RMB 0.16[6] - Operating profit decreased by 48.03% to RMB 1,843 million from RMB 3,546 million in the previous period, mainly due to rising oil prices[15] - Net profit for Q1 2017 was 1,840 million RMB, a decrease of 39.3% from 3,035 million RMB in the previous year[28] - Total comprehensive income for Q1 2017 was RMB 1,134 million, a decrease of 46.6% from RMB 2,123 million in Q1 2016[31] Assets and Liabilities - Total assets at the end of the reporting period reached RMB 202,131 million, an increase of 0.83% compared to the end of the previous year[6] - The company's total liabilities decreased by 41.00% in cash paid for debt repayment, amounting to RMB 13,102 million compared to RMB 22,207 million in the previous period[18] - The company's total assets as of March 31, 2017, amounted to 202,131 million RMB, compared to 200,461 million RMB at the beginning of the year[21] - Total liabilities were reported at 145,464 million RMB, slightly down from 145,753 million RMB at the start of the year[21] - The company reported a significant increase in short-term borrowings, rising to 11,984 million RMB from 4,195 million RMB, indicating a shift in financing strategy[21] Cash Flow - Net cash flow from operating activities was RMB 2,857 million, down 41.41% year-on-year[6] - Cash received from operating activities increased by 40.61% to RMB 412 million from RMB 293 million, primarily due to an increase in VAT refunds received during the reporting period[18] - Operating cash flow for Q1 2017 was RMB 2,857 million, down 41.4% from RMB 4,876 million in Q1 2016[35] - Net cash flow from operating activities decreased to $2,032 million, down from $4,182 million, a decline of 51.4%[39] - The company reported a total cash outflow from operating activities of $20,559 million, up from $16,169 million, an increase of 27.5%[39] Shareholder Information - Net assets attributable to shareholders of the listed company amounted to RMB 44,745 million, reflecting a growth of 3.62% year-on-year[6] - The total number of shareholders at the end of the reporting period was 280,152[10] - The largest shareholder, China Southern Airlines Group Company, held 4,039,228,665 shares, accounting for 41.14% of total shares[10] Other Financial Metrics - The weighted average return on net assets fell by 3.12 percentage points to 3.53%[6] - Non-operating income included RMB 182 million from the disposal of non-current assets and RMB 99 million from other non-operating income[7] - The company's income tax payable increased by 39.04% to RMB 1,250 million from RMB 899 million, mainly due to accrued corporate income tax not yet paid during the reporting period[14] - The company's inventory increased to 1,156 million RMB from 1,036 million RMB, reflecting a year-over-year growth of 11.6%[24] - Investment income for Q1 2017 was RMB 220 million, a decrease from RMB 268 million in the same period last year[30]

Financial Performance - The company reported a total revenue of approximately RMB 982 million for the year ending December 31, 2016, with a proposed dividend of RMB 1 per 10 shares[11]. - In 2016, China Southern Airlines achieved operating revenue of RMB 114,792 million, a 2.95% increase from RMB 111,500 million in 2015[29]. - The net profit attributable to shareholders reached RMB 5,055 million, representing a significant increase of 29.88% compared to RMB 3,892 million in 2015[29]. - The net cash flow from operating activities was RMB 26,388 million, a 2.61% increase from RMB 25,718 million in 2015[29]. - The total assets of the company increased to RMB 200,461 million, a 7.49% rise from RMB 186,499 million in 2015[29]. - The company’s weighted average return on equity increased to 12.28% in 2016, up from 10.38% in 2015, reflecting improved profitability[30]. - Operating revenue for Q4 2016 was RMB 28,140 million, with a total annual operating revenue of RMB 114,792 million, reflecting an increase of 8.71% compared to 2015[36]. - The gross profit margin for the main business was 15.65%, with a year-on-year decrease of 11.23%[110]. - The company reported a net cash outflow from investment activities of RMB 16,069 million, a significant increase of 94.26% compared to RMB 8,272 million last year[109]. Fleet and Operations - As of the end of the reporting period, the company operated a fleet of 702 aircraft, ranking first in Asia and fourth globally[3]. - The company is the first globally to operate both Airbus A380 and Boeing 787 aircraft, showcasing its advanced fleet capabilities[3]. - The airline achieved a passenger transport volume of 115 million in 2016, maintaining its position as the largest airline in China for 38 consecutive years[12]. - The company operated a fleet of 702 aircraft by the end of the reporting period, an increase of 35 aircraft year-on-year, maintaining the largest fleet in Asia[16]. - The total number of available seats in the market reached 300,000[12]. - The fleet size at the end of 2016 was 702 aircraft, with 688 being passenger aircraft[53]. - The company plans to introduce a total of 53 aircraft during the reporting period, including 29 B737-800 and 18 B787-9 aircraft[122]. - The fleet's overall load factor was 80.51%, indicating efficient capacity management[63]. Market Presence and Strategy - The company is a member of the SkyTeam alliance and has the largest passenger volume in China, indicating strong market presence[3]. - The company aims to build an international network airline, focusing on expanding its reach in Asia, Europe, America, Oceania, and Africa[12]. - The company emphasizes a "hub + point-to-point" operational model, balancing domestic and international markets to enhance network coverage[18]. - The strategic focus includes building a dual-hub system in Guangzhou and Beijing to improve operational efficiency and service quality[18]. - The company plans to continue expanding its international routes and enhancing operational efficiency to drive future growth[36]. - The company aims to become an international network airline, focusing on a strategic layout centered around Guangzhou and Beijing[156]. Safety and Risk Management - Safety remains a top priority, with the company achieving 17 consecutive years of aviation safety, maintaining the best safety record among Chinese airlines[19]. - The company has conducted 8 safety management committee meetings and 7 safety video conferences, training 366 personnel in safety workshops[19]. - The company has a comprehensive risk analysis detailed in the report, with no significant risks identified during the reporting period[11]. - The company faces challenges including a 6.39% depreciation of the RMB against the USD in 2016, which may impact performance due to currency fluctuations[17]. - The company has not reported any non-operational fund occupation by controlling shareholders during the reporting period, indicating financial stability[11]. Challenges and Market Conditions - Rising oil prices are anticipated due to OPEC production cuts, which could significantly increase fuel costs, a major operational expense for the company[17]. - The expansion of China's high-speed rail network, reaching 22,000 kilometers, poses a competitive threat to air travel, particularly on routes under 800 kilometers[17]. - The company faces risks from alternative transportation modes, such as rail and road, which may impact its business in the short to medium term[147]. - Increased competition from low-cost carriers and foreign airlines poses significant challenges to the company's market share and profitability[146]. Customer Engagement and Loyalty - The company has over 30.1 million members in its loyalty program, enhancing its brand influence domestically and internationally[16]. - The company’s customer satisfaction rate reached 97.47%, with sales revenue from the customer service center exceeding RMB 3 billion[95]. - The company’s social media revenue grew by 262.3%, with significant engagement on its WeChat public account, which was recognized as the most influential new media account among central enterprises in 2016[98]. Future Outlook and Development - The company plans to build a fleet of over 1,000 aircraft and achieve an annual passenger volume of approximately 160 million by the end of the 13th Five-Year Plan[141]. - The company anticipates significant growth opportunities in the international aviation market, with a projected 1.5 billion air travel trips by 2020[140]. - The company aims to achieve an annual flight punctuality rate that is industry-leading, ensuring effective service guarantees for passengers[145]. - The company plans to launch all core functions of the "Southern Airlines e-Travel" platform within the year, enhancing convenience for users[145]. Governance and Management - The company has a structured remuneration policy for directors and supervisors based on shareholder approval and management systems[193]. - The company’s governance structure includes a mix of executive and independent directors, promoting balanced decision-making[188]. - The management team includes professionals with backgrounds in engineering, economics, and political science, ensuring a diverse skill set for strategic decision-making[194]. - The company emphasizes strong governance with a supervisory board comprising experienced professionals from various sectors[197].

Financial Performance - Net profit attributable to shareholders increased by 37.45% to RMB 6,441 million compared to the same period last year[8] - Operating revenue for the first nine months reached RMB 86,652 million, a 1.52% increase year-on-year[7] - Basic earnings per share rose by 37.50% to RMB 0.66 compared to the same period last year[8] - The weighted average return on equity increased by 2.99 percentage points to 15.34%[8] - The company reported a net profit of RMB 5,905 million excluding non-recurring gains and losses, a 34.42% increase year-on-year[8] - The company’s operating profit for Q3 2016 was RMB 3,881 million, significantly higher than RMB 1,285 million in Q3 2015, representing a growth of 202.5%[33] - Net profit for Q3 2016 reached 2,652 million RMB, up 388.5% from 542 million RMB in Q3 2015[36] - The company achieved a total comprehensive income of 4,889 million RMB for the first nine months of 2016, compared to 3,241 million RMB in the same period last year[37] Assets and Liabilities - Total assets increased by 3.26% to RMB 192,587 million compared to the end of the previous year[7] - The total liabilities of the company were RMB 136,350 million, slightly down from RMB 136,701 million at the beginning of the year[26] - The company reported a significant increase in non-current assets, totaling RMB 178,685 million, compared to RMB 171,832 million at the beginning of the year[25] - Long-term borrowings decreased by 89.93% to RMB 1,297 million, attributed to increased loan repayments[13] - Short-term borrowings decreased by 78.17% to RMB 4,254 million compared to the previous year-end[13] - Other current liabilities increased by 131.41% to RMB 18,513 million, mainly due to the increase in short-term financing bonds[13] Cash Flow - Cash flow from operating activities for the first nine months was RMB 20,569 million, up 5.62% from the previous year[7] - Operating cash flow for the first nine months of 2016 was RMB 16,381 million, slightly down from RMB 16,616 million in the same period last year, representing a decrease of 1.42%[42] - Total cash inflow from operating activities was RMB 67,270 million, compared to RMB 65,210 million in the previous year, indicating an increase of 3.16%[42] - Cash outflow from financing activities totaled RMB 69,312 million, up from RMB 39,581 million, reflecting a significant increase of 75.25%[41] - Cash inflow from financing activities reached RMB 39,745 million, a substantial increase from RMB 7,570 million in the previous year[43] Shareholder Information - The total number of shareholders reached 295,297 by the end of the reporting period[10] - The largest shareholder, China Southern Airlines Group, holds 41.14% of the shares[10] - The company has committed to not reducing its shareholdings during periods of abnormal market fluctuations, ensuring stability for investors[21] - China Southern Airlines has a long-term commitment to support its operational development and enhance performance for better investor returns[21] Investment and Income - Investment income rose by 36.60% to RMB 836 million, driven by improved profitability in aviation business investments[14] - Operating income from government subsidies and non-current asset disposals increased by 33.74% to RMB 2,858 million[14] - The company reported a financial expense of 936 million RMB in Q3 2016, a significant decrease from 3,853 million RMB in Q3 2015[35] Tax and Other Expenses - Tax payable surged by 508.75% to RMB 1,461 million, primarily due to accrued corporate income tax[13] - Non-operating income and expenses totaled RMB 245 million for the reporting period[9] - The company’s financial expenses for the first nine months decreased to RMB 3,825 million from RMB 5,789 million, a reduction of 33.8%[32] Other Financial Metrics - The company’s cash and cash equivalents decreased to RMB 4,654 million from RMB 5,610 million at the beginning of the year, reflecting a decline of approximately 17%[24] - Accounts receivable increased to RMB 3,015 million, up from RMB 2,593 million, representing a growth of about 16%[24] - The company’s equity attributable to shareholders rose to RMB 44,342 million from RMB 39,191 million, marking an increase of approximately 13%[26]

Financial Performance - The company reported a total revenue of RMB 50.3 billion for the first half of 2016, representing a year-on-year increase of 5.2%[15]. - Operating revenue for the first half of 2016 was RMB 54,054 million, an increase of 1.36% compared to RMB 53,327 million in the same period of 2015[16]. - Net profit attributable to shareholders for the first half of 2016 was RMB 3,111 million, a decrease of 10.65% from RMB 3,482 million in the first half of 2015[16]. - Basic earnings per share for the first half of 2016 was RMB 0.32, down 8.57% from RMB 0.35 in the same period of 2015[18]. - The total operating revenue for the reporting period was RMB 54,054 million, an increase of RMB 727 million or 1.36% year-on-year[54]. - The net profit attributable to shareholders was RMB 3,111 million, a decrease of RMB 371 million or 10.65% year-on-year[54]. - The total comprehensive income for the first half of 2016 was RMB 3,570 million, down from RMB 4,110 million in the first half of 2015, a decline of 13.1%[138]. - The company reported a total of RMB 44,268 million in operating costs for the first half of 2016, an increase from RMB 43,563 million in the same period of 2015[138]. Passenger and Cargo Operations - Passenger traffic increased by 8.1% year-on-year, with a total of 55.2 million passengers carried during the reporting period[15]. - The passenger load factor reached 82.5%, an increase of 1.5 percentage points compared to the same period last year[15]. - Cargo revenue increased by 3.4% year-on-year, totaling RMB 8.1 billion, with a cargo load factor of 62.3%[15]. - The number of passengers carried in the first half of 2016 was 54,664.38 thousand, an increase of 2.22% compared to 53,478.21 thousand in the same period of 2015[27]. - Revenue passenger kilometers (RPK) for international routes increased by 29.96% to 28,163.28 million from 21,670.39 million in the first half of 2015[27]. - As of June 30, 2016, total transport cargo volume reached 752.06 thousand tons, an increase of 5.53% compared to 712.64 thousand tons in 2015[29]. - International route cargo volume increased by 15.56% to 237.82 thousand tons, while domestic routes saw a modest increase of 1.56%[29]. Fleet and Capacity Expansion - The company plans to expand its fleet by adding 20 new aircraft by the end of 2016, enhancing its operational capacity[15]. - The total number of aircraft in the fleet as of June 30, 2016, was 684, with 670 passenger aircraft and 14 cargo aircraft[31]. - The average age of the fleet was 6.6 years, with the youngest aircraft being the B777-300ER at 1.3 years[32]. - The fleet size reached 684 aircraft, with a net increase of 17 aircraft during the reporting period[36]. - The company plans to introduce 32 new aircraft in the second half of 2016, including 1 B777-300ER, 1 A330-300, 1 B787-9, and 5 A320neo[51]. Strategic Initiatives - The company has initiated a strategic partnership with international airlines to enhance its global reach and market presence[15]. - The company is focusing on improving customer service through the development of new technologies and mobile applications[15]. - The company aims to optimize its fleet structure by phasing out older models such as B757-200 and B737-300 during the 13th Five-Year Plan period[51]. - The company will focus on expanding its international route network, with new routes planned from Guangzhou to Toronto and Adelaide[52]. - The company plans to strengthen its marketing capabilities and enhance direct sales ratios by developing fan and member programs[53]. Financial Position and Liabilities - Total assets as of June 30, 2016, were RMB 191,212 million, an increase of 2.66% from RMB 186,250 million as of December 31, 2015[16]. - The total liabilities were RMB 138,753 million, an increase of 1.52% from the beginning of the period[54]. - The company reported a current ratio of 0.24 as of June 30, 2016, an increase of 9.09% from 0.22 at the end of 2015, primarily due to an increase in cash holdings[122]. - The debt-to-asset ratio decreased to 72.57% from 73.38%, reflecting a slight improvement in financial leverage[122]. - The company maintained a loan repayment rate of 100% for both 2016 and 2015, indicating strong debt management[122]. Operational Efficiency and Cost Management - The company continues to focus on improving operational efficiency and service quality to enhance its competitive position in the market[34]. - The total operating cost was RMB 44,268 million, an increase of RMB 705 million or 1.62% compared to the previous year[56]. - Employee compensation expenses were RMB 7,276 million, an increase of 12.32% year-on-year, attributed to an increase in flight hours and workforce[68]. - The company will implement a comprehensive budget management system to improve resource utilization efficiency and control costs[53]. Corporate Governance and Compliance - The company remains committed to maintaining compliance with regulatory requirements and improving corporate governance practices[6]. - The company has engaged KPMG as its auditor for the 2016 financial reports, replacing PwC and RSM[99]. - The company maintained compliance with the corporate governance code as outlined in the Hong Kong Stock Exchange listing rules throughout the reporting period[110]. - The company actively engaged with investors, hosting one earnings release analyst meeting, one media conference, and conducting 16 one-on-one and one-to-many meetings with 126 investors[112]. Shareholder Information - The total number of shares remained unchanged at 9,817,567,000 as of June 30, 2016, with 71.53% being RMB ordinary shares and 28.47% being overseas listed foreign shares[101]. - The largest shareholder, China Southern Airlines Group, holds 4,039,228,665 shares, representing 41.14% of total shares[102]. - China Southern Airlines Group committed to not reducing its shareholdings during market fluctuations and to potentially increase its stake in the company[99]. Risk Management and Future Outlook - The overall operating environment remains challenging due to intense domestic competition and fluctuating currency exchange rates[34]. - Future guidance indicates an expected revenue growth of 6-8% for the second half of 2016, driven by increased passenger demand[15]. - The company will continue to monitor market conditions and consider foreign exchange hedging strategies when oil prices reach favorable levels[53].