CSN(600029) 西南证券·2024-07-07 06:30Investment Rating - The report maintains a "Buy" rating for China Southern Airlines (600029) with a target price of 7.20 CNY over the next six months [1]. Core Insights - In Q1 2024, the company turned a profit with a net profit of 756 million CNY, reversing previous losses, driven by a significant increase in inbound tourism and operational recovery [2][23]. - The company achieved a 126.9% increase in passenger revenue in 2023, with a passenger load factor of 78.09%, outperforming industry averages [2][24]. - The airline's fleet size reached 917 aircraft by the end of March 2024, maintaining its position as the largest airline in China by passenger volume [2][11]. Summary by Sections Company Overview - China Southern Airlines is the largest airline in China by passenger volume, with a well-developed route network and a fleet of 917 aircraft as of March 2024 [11][12]. - The company aims to strengthen its main business and improve operational quality, focusing on enhancing domestic and international service offerings [23][24]. Industry Analysis - The Chinese civil aviation industry is recovering from the impacts of the pandemic, with total transport turnover in Q1 2024 exceeding pre-pandemic levels by 12.93% [2][17]. - Domestic travel demand has surged, with passenger turnover exceeding 2019 levels by 20.2%, while international recovery remains slower due to geopolitical factors [18][21]. Financial Forecast and Valuation - Projected revenues for 2024, 2025, and 2026 are 193.78 billion CNY, 205.06 billion CNY, and 214.07 billion CNY, respectively, with net profits expected to be 6.11 billion CNY, 9.24 billion CNY, and 11.31 billion CNY [3][35]. - The report suggests a price-to-book (PB) ratio of 3 for 2024, leading to a target price of 7.20 CNY based on comparable companies [36].