\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 111 Air China Limited(601111) )
Event: Air China Limited(601111) released the annual report of 2021. In 2021, the company achieved a revenue of 74.532 billion yuan, a year-on-year increase of + 7.23%; The net profit attributable to the parent company was -16.642 billion yuan, with a year-on-year increase of 2.233 billion yuan. Among them, 2021q4 achieved a revenue of 17.074 billion yuan, a year-on-year increase of – 18.89%, and the net profit attributable to the parent company was -6.321 billion yuan, a year-on-year increase of 2.023 billion yuan.
In 2021, the demand for Chinese routes rebounded slightly. Disturbed by the epidemic, Q4 declined significantly, and the international routes continued to decline throughout the year. In 2021, the company’s overall / domestic / international ask growth rate was -2.32% / + 7.66% / – 77.72%, RPK growth rate was -4.74% / + 4.51% / – 84.00%, and the passenger seat rate was 68.63% / 69.55% / 45.28%, year-on-year -1.75pts / – 2.10pts / – 17.78pts. Among them, Q4 China ask was – 33.20% year-on-year, RPK was – 39.27% year-on-year, and the seating rate was 65.06%, year-on-year -6.29pts. In 2021, China’s routes rebounded slightly as a whole. In the second half of the year, affected by the epidemic, the traffic volume and passenger seat rate decreased year-on-year. Due to the impact of overseas Omicron epidemic, the supply and demand of international routes continued to decline throughout the year. On the ticket price side, the revenue per passenger kilometer of the company 2021 was 0.56 yuan, a year-on-year increase of + 9.85%, and the ticket price stabilized and rebounded. At the same time, it was affected by the re collection of Civil Aviation Development Fund and the collection of fuel surcharge due to the rise of oil price. In 2021, the company’s freight business continued to grow, with revenue of 11.113 billion yuan, a year-on-year increase of + 29.93%, and the total turnover of cargo and mail + 20.93%.
The utilization rate of aircraft is basically flat, the rise of oil price drives the cost upward, and the expense rate remains stable. The company’s daily aircraft utilization rate in 2021 was 6.28 hours, a year-on-year decrease of 0.06 hours and a decrease of 3.44 hours compared with 2019. In the first half of the year, the company’s unit ask cost was 0.56 yuan, a year-on-year increase of + 16.2%; Affected by the increase of fuel consumption and the rise of aviation fuel price, the company’s aviation fuel cost was + 39.7% year-on-year, and the unit ask fuel cost was 0.14 yuan, year-on-year + 43.0%; The unit ask non oil cost was 0.43 yuan, a year-on-year increase of + 9.7%, which was mainly affected by the continuous decline of total traffic volume and the re collection of Civil Aviation Development Fund. On the expense side, in 2021, in addition to financial expenses, the comprehensive expense rate was 12.21%, with a year-on-year rate of -0.26pts, which remained stable as a whole. In 2021, the company’s net exchange income was 1.235 billion yuan, a year-on-year increase of -2.368 billion yuan, making the financial expense rate reach 5.54%, a year-on-year increase of + 3.65 PTS.
The speed of aircraft introduction has slowed down significantly. After the epidemic, the difference between supply and demand superimposes the elasticity of ticket prices, which is optimistic about the reversal of aviation performance. According to the future aircraft introduction and exit plan of the three major airlines, the growth rate of the total fleet from 2022 to 2024 was 4.91%, 3.24% and 0.23% respectively, with a compound growth rate of 2.78% in three years, while the compound growth rate in the five years from 2013 to 2018 was 7.29%. Among them, the growth rate of Air China’s fleet from 2022 to 2024 is 3.22%, 0% and – 0.26% respectively, with zero growth in 2022. It is expected that the withdrawal will be more than the introduction in 2023. Since the introduction of low-speed aircraft manufacturers and the company’s orders in 2019, the company has maintained a strong growth rate, which has been affected by the current low-speed aircraft industry and the company’s plan to introduce 7max aircraft in 2019. With the recovery of demand after the epidemic, there is expected to be a significant difference between supply and demand. The market-oriented reform of superimposed ticket prices continues to advance. At present, the full ticket price of core routes has increased by 20% – 30% compared with that before the epidemic, opening up the space for price elasticity and optimistic about the reversal of aviation performance after the recovery of the epidemic.
Investment suggestion: with the continuous promotion of strengthening acupuncture and specific drugs, it is expected that the epidemic situation in China will be controlled as a whole. With the improvement of the epidemic situation, China’s line demand will continue to rise; After the epidemic situation stabilizes, international routes are expected to be gradually explored and liberalized through pilot methods. The company has high-quality Chinese routes, with a large proportion of international routes and good revenue quality. The recovery after the epidemic has brought considerable flexibility. We expect the net profit of the company from 2022 to 2024 to be – 8.31 billion yuan, 6.89 billion yuan and 12.62 billion yuan respectively, with a corresponding PE of – 17x 20x 11x, maintaining the “Buy-A” rating.
Risk tip: the recovery of aviation demand is lower than expected, the oil price rises sharply and the RMB depreciates sharply.
