Air China(601111) 群益证券·2024-02-28 16:00Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside in the stock price [2][3]. Core Views - The aviation industry is experiencing a recovery, with the company's performance significantly improving, leading to a substantial reduction in losses for the year [3]. - The company is the only flag carrier in China, establishing a robust aviation network centered around major cities, and holds the largest share of flight slots at key airports [3]. - The recovery in domestic routes has surpassed pre-pandemic levels, with available seat kilometers (ASK) and revenue passenger kilometers (RPK) recovering to 89.8% and 80.8% of 2019 levels, respectively [3]. - International routes are expected to recover further in 2024, supported by recent policy changes and negotiations that will increase flight frequencies [3]. Summary by Sections Company Overview - The company operates in the transportation sector, specifically in aviation, with a current A-share price of 7.48 as of February 28, 2024 [2]. - Major shareholders include China National Aviation Holding Company, holding 39.57% of shares [2]. Financial Performance - The company reported a significant reduction in losses, with a projected net loss of 11.66 billion RMB for 2023, compared to a loss of 39.2 billion RMB in 2022 [4]. - The forecasted net profit for 2024 is 9.502 billion RMB, indicating a turnaround from previous losses [4]. - Earnings per share (EPS) are expected to improve from -0.07 RMB in 2023 to 0.59 RMB in 2024 [4]. Market Outlook - The report anticipates that the recovery in passenger travel will continue, with domestic passenger transport expected to reach 630 million in 2024, a 7.7% increase from 2019 [3]. - The company’s aircraft utilization rates are expected to improve as international routes recover, enhancing profitability [3].