Air China(601111) 东兴证券·2024-09-05 04:00Investment Rating - The report maintains a "Recommended" rating for China National Aviation (601111.SH) due to the expected recovery in the aviation industry and the company's significant exposure to international routes, which offers substantial profit elasticity during the industry's recovery phase [3]. Core Views - The company experienced a revenue of 79.52 billion yuan in the first half of 2024, a year-on-year increase of 33.39%, but still reported a net loss attributable to shareholders of 2.782 billion yuan, an improvement from a loss of 3.451 billion yuan in the same period last year [2]. - The increase in passenger traffic was accompanied by a decrease in ticket prices and rising fuel costs, leading to continued losses despite improved operational metrics such as passenger load factor [2]. - The company is facing supply-side pressure due to an increase in fleet size, with a net addition of 10 aircraft in the first half of 2024, and plans to add 34 more aircraft by the end of the year [3]. Financial Performance Summary - Passenger revenue reached 73.137 billion yuan, up 31.85% year-on-year, with capacity growth of 33.38% and a passenger load factor increase of 8.77 percentage points to 79.29% [2]. - The average passenger kilometer yield decreased by 12.08% to 0.537 yuan, indicating a challenging pricing environment [2]. - Operating costs rose to 77.470 billion yuan, a 30.84% increase year-on-year, primarily driven by higher fuel prices [2]. Profit Forecast and Investment Recommendations - The profit forecasts for 2024-2026 have been revised downwards to net losses of 1.39 billion yuan, a profit of 3.284 billion yuan, and a profit of 7.918 billion yuan, respectively, with corresponding EPS of -0.09, 0.20, and 0.49 yuan [3][7]. - The report emphasizes the potential for recovery in the aviation sector and the company's strategic positioning in international routes, which could lead to significant profit recovery as demand improves [3].