Air China (601111) 18 Yearly Annual Report Commentary: Q4 Performance Exceeds Expectation and Progressive Performance Contrarian Growth
Investment Highlights Air China released its 2018 annual report: Air China achieved operating income of 1,367 in 2018.
$ 7.4 billion, an increase of 12 per year.
70%; realized net profit attributable to mother 73.
36 ppm, an increase of ten years.
33%; combined basic profit income 0.
53 yuan, an increase of 1 within a year.
Among them, the fourth quarter achieved revenue of 338.
0.94 million yuan, an increase of 14 in ten years.
85%; net profit attributable to mother 3.
99 ppm, an increase of 14 per year.
37 trillion, performance exceeded expectations.
Benefiting from the steady growth of demand, the lateral reform of civil aviation supply and the advancement of budget reform have witnessed significant growth for at least several decades.
In 18 years, Air China passenger-kilometer income is 0.
55 yuan, an annual increase of 2.
On the cost side, fuel pressure stresses, but non-oil unit costs are significantly reduced.
In 18 years, Air China’s fuel costs increased by 35 per year.
5% to 385 ppm, a total increase of 6 after deducting fuel costs.
1%, which is significantly lower than the growth rate of business volume, and the cost of non-oil seat kilometers decreased by about 3.
4%, total operating costs previously increased by 14.
Benefiting from the expansion of operation scale, the improvement of income level and effective control of cost side, Air China gradually realized gross profit of 216.
4 ‰, an annual increase of 2.
Exchange and investment income volatility.
18 years of RMB exchange rate depreciation5.
04%, affected by this, Air China incurred exchange losses of 23.
At 77 ppm, exchange rate appreciation in 2017 produced exchange gains of 29.
28 trillion US dollars, eliminating the impact of foreign exchange, Air China in 18 years to maximize profits of 12.3 billion US dollars, followed by an increase of 44.
As Cathay Pacific turned a deficit, it sold 51% of Air China Cargo 天津夜网 with an investment income of -3.
08 billion to 13.
US $ 6.8 billion, after deducting the impact of foreign exchange and investment income, Air China’s total profit for 18 years was 109.
66 ppm, an increase of 23 in ten years.
Investment strategy: Air China’s main routes occupy a relatively high proportion, and its profitability and performance stability are strong. This translates into continuous fermentation of the 737-8 grounding event. It is expected that the insertion and operation of 737 aircraft will be difficult to recover in the short term.Increasing other budgets to introduce or reduce withdrawal from appropriate supply pressures, but the industry’s growing supply-demand gap is difficult to reverse, and the elasticity of spending in the peak season helps expand.
EPS are expected to be 0 in 19-21.72, 0.
08 yuan, corresponding to April 13, PE is 16, 13, 10 times, maintaining the “prudent increase” level.
Risk reminder: 737max event fermentation exceeds expectations, policy uncertainty, macroeconomic growth stall, escalation of international trade friction, air crash, terrorist attack, war, disease outbreak and other uncertain events