Air China(601111) 光大证券·2024-03-30 16:00Investment Rating - The report maintains an "Accumulate" rating for both A-shares and H-shares of the company [2]. Core Views - The company reported significant improvement in operating performance, with a notable reduction in net losses due to investment income from Cathay Pacific [2]. - The recovery in air passenger demand in 2023 has led to a marked improvement in the company's production and operations, although international routes are still in the process of recovery [2]. - The company has a clear geographical advantage and high-quality routes, which are expected to enhance profitability as international routes continue to recover in 2024 [2]. Summary by Relevant Sections Financial Performance - In 2023, the company achieved operating revenue of 141.1 billion yuan, a year-on-year increase of 167%, and a net loss attributable to shareholders of 1.05 billion yuan, significantly reduced from a loss of 38.6 billion yuan the previous year [2]. - The fourth quarter saw operating revenue of 35.6 billion yuan, a quarter-on-quarter decline of 22.3%, with a net loss of 1.84 billion yuan, reversing from a profit of 4.2 billion yuan in Q3 [2]. Operational Metrics - The available seat kilometers (ASK) in 2023 increased by 4.1% compared to 2019, with domestic ASK up by 45.8% [2]. - The overall passenger load factor for 2023 was 73.3%, down 7.7 percentage points from the same period in 2019 [2]. - The fleet size at the end of 2023 was 905 aircraft, an increase of 143 aircraft from the previous year, representing an 18.8% growth [2]. Revenue and Cost Analysis - The passenger revenue per kilometer in 2023 was 0.6094 yuan, a decrease of 3.96% from 2022 but an increase of 14.1% compared to 2019 [2]. - The gross profit margin for 2023 was 5.02%, recovering from negative territory but still down 11.04 percentage points from 2019 [2]. Investment Contributions - The investment income from Cathay Pacific amounted to 2.43 billion yuan, contributing to the company's performance recovery [2]. - The company acquired control of Shandong Airlines in March 2023, which is expected to further enhance its profitability [2]. Future Projections - The report forecasts net profits of 8.1 billion yuan, 10 billion yuan, and 12.1 billion yuan for 2024, 2025, and 2026 respectively [2]. - The company is expected to benefit from the continued recovery of international routes, which will release significant profit potential [2].