Air China (601111): Multi-factors in the fourth quarter contributed to the initial growth of positive performance, performance exceeded expectations
The event Air China revealed its annual report with an expected income of 1367.
700 million, an increase of 12 in ten years.
7%, achieving net profit of 73%.
4 billion, an annual increase of 1.
The initial budget turned positive, unit non-oil cost savings, and performance exceeded expectations. The company’s long-term ASK increased by 10.
4%, RPK increased 9 in half a year.
7% and 80% load factor.
6%, a decline of 0 per year.
54pct; the quality of the revenue improved, and the long-term passenger-km benefit was 0.
5461 yuan, at least an increase of 2.
9%, driving revenue to achieve double-digit growth.
Cost: Due to rising oil prices, the company’s jet fuel cost was 384.
800 million, an increase of 35 per year.
5%, non-oil cost 766.
5 billion, an annual increase 深圳桑拿网 of 6.
6%, unit ASK non-oil cost 0.
2802 yuan, down 3 before.
Expenses: Agency fees continue to fall, helping to reduce the sales expense ratio by 0.
40 points to 4.
64%, the management expense ratio also fell slightly, down by 0.
18 points to 3.
At 42%, the financial expense ratio was 23.
7.7 billion exchange losses, initial financial expenses52.
7.6 billion, an increase of 52 in ten years.
2.3 billion, financial expense ratio increased by 4.
30 minutes to 4.
35%. Excluding the impact of foreign exchange loss gains and losses, the financial expense ratio will fall to 0.
34 points to 2.
Other miscellaneous: In terms of investment income, the company’s investment income reached 13 due to Cathay Pacific’s turnaround and shortened investment income from Air China Cargo.
6.8 billion, an increase of 16 in ten years.
In terms of subsidies, the company continued to receive government subsidies due to the increase in airline subsidies31.
3.4 billion, an annual increase of 6.
Taken together, the company’s performance exceeded expectations, gradually deducting the maximum profit.300 million, an increase of 44 in ten years.
In the fourth quarter, multiple factors helped to achieve profitability. Looking at the fourth quarter, the income side: The company’s income side is affected by the adjustment of the caliber. We estimate that the unit RPK operating income will increase and increase.
5%, and in the fourth quarter of 2017, the indicator decreased by 10 compared with the same period in 2016.
3%, even added back to the 12 that was allocated in 2017.
8.7 billion, which is also lower than the same period in 20166.
2%, so the abnormal unit income in the fourth quarter is likely to be the influence of caliber adjustment.
Cost side: We estimate the company’s aviation fuel cost106.
800 million, an annual increase of 37%, non-oil costs 203.
800 million, an annual increase of 3.
9%, the unit ASK non-oil cost decreases by 3 every year.
Expenses: In the fourth quarter, the company’s sales management expenses were relatively stable, and financial expenses increased due to the base effect of exchange gains recorded in the same period of 2017.
Miscellaneous: In the fourth quarter, the company’s asset impairment loss was zero.
3.4 billion, compared with 5 in the same period last year.
7.2 billion; net investment income is 3.
9.4 billion, compared with expectations for the same period last year.
5.5 billion, subsidy income 8.
4.6 billion, compared with 20 in the same period last year.
5.9 billion; non-operating income 1.
9.9 billion, compared with -1 in the same period last year.
0.5 billion; non-operating expenses were zero.
4.7 billion, compared with 2 in the same period last year.
5.5 billion. Therefore, in addition to the improvement in book subsidy income, the marginal improvement of other miscellaneous items has become an important booster for the company’s recorded profit in the fourth quarter, driving profit beyond expectations.
Investment suggestions We believe that with the full grounding and continuous delivery of Boeing 737MAX8, the industry will gradually break through the compressed supply gap, so that demand will continue to recover, gradual reforms will continue, and price elasticity will eventually be released.
The company is the only air carrier carrying the national flag. The loyalty of public business travelers is high, the quality of revenue is good, and the price will continue to be firm. Taking into account the decrease in oil prices and the appreciation of the exchange rate at the time of dividing the previous report, we have since 84.
300 million, 119.
100 million increase the profit forecast for 2019-202034.
1% to 113.
500 million, 132.
300 million, EPS is 0.
83 yuan, 0.
96 yuan since 9.
15 yuan raises the target price by 36% to 12.
45 yuan, corresponding to 15 times the estimated PE in 2019.
Risk reminder: Macroeconomic exceeds expectations, oil price growth gradually increases, exchange rate changes, security accidents