Air China (601111): The multi-year growth rate of supply and demand in November was basically the same as that of October when the fast passenger load factor was extended.

Air China (601111): The multi-year growth rate of supply and demand in November was basically the same as that of October when the fast passenger load factor was extended.

The company’s recent situation Air China announced November operating data: Demand (RPK) further increased3.

9%, the supply (ASK) increased by 4% in ten years, and the load factor fell slightly 0 times.

1 up to 79.


On January 11, 2019, the company’s RPK increased by 5 per year.

7%, may I increase by 5 per year.

1%, the cumulative load factor increases by 0 every year.

4 up to 81.


Comments In November, the net growth of aircraft increased, and the growth rate of capacity increased faster than in October.

In November, the company introduced 7 A320 series aircraft and withdrew from one B737-800 aircraft, adding a net increase of 6 aircraft, which is the month to resume the current aircraft transfer in 2019.

ASK increased by 4% in half in November, exceeding 2% in October.

By region, the domestic line ASK grows by 4 per year.

9%, up from 2 last month.

8%; International Decade growth of 3.

9%, higher than the previous month’s 1.

4%, we estimate or because the company ‘s Japanese line capacity expansion is accelerating: According to CAPA data, Air China ‘s parent company and Shenzhen Airlines ‘Japanese line ASK increased by about 38% in November; regional line ASK stayed for at least 9 days.

4% earlier than October 3.

The 8% upper limit was further expanded.

The passenger load factor dropped slightly in November for six months, and the regional line was a significant drag.

The company’s passenger load factor fell slightly to zero in half a year in November.

1ppt to 79.

5%, of which domestic passenger load factor drops 0 every year.

2ppt to 81%, international passenger load factor increased by 0.

8ppt to 77.

8%, regional line minimum interest rate 7.

5%, although the decrease was 8 from the previous month.

3% narrowed, but still dragged down the overall load factor performance.

The current estimate is still lower than the historical average, and multi-factor catalysis 合肥夜网 has converged upward.

The company’s current P / B ratio is lower than its historical average, and we believe that multiple positive future catalysts will gradually increase: 1) The market-oriented reform of air tickets is steadily advancing.

The company has already raised the full economy class prices of some routes such as Beijing-Chengdu, which is expected to increase performance; 2) The Chinese New Year is in a favorable period and the operating performance is favorable.

Considering that the 2020 Spring Festival holiday (New Year’s Eve on January 24, 2020) is earlier than 2019 (New Year’s Eve on February 4, 2019), we estimate that the supply and demand growth rate may gradually accelerate in January and February 2020; 3) the risk of oil sinks tends to ease.

According to the forecast of the CICC Macro Group, the 佛山桑拿网 exchange rate of RMB against the US dollar will be basically flat in 2020 (vs.

Depreciation in 2019 is about 2.

7%), the reduction of foreign exchange losses or losses will increase the net profit of about 1.3 billion yuan.

According to the prediction of the CICC bulk group, the average price of Brent oil in 2020 is 55.

8 US dollars / barrel, annual decline of about 5-8 US dollars / barrel, net profit is expected to increase by about two to three billion in ten years.
It is estimated that the company currently can sustainably correspond to 2019/20201.

2 times P / B.

Maintain 2019 / 2020e profit forecast 77.


1.3 billion.

Maintain A / H shares outperform industry rating and target price of RMB.

10 yuan (corresponding to 1.

5 times 2020 P / B, 24.

3% upside) / HKD 9.

20 yuan (corresponding to 1.

1x 2020 P / B, 18.

3% upside).

Risks Aviation demand fell short of expectations; RMB depreciated sharply against the US dollar; oil prices rose sharply.