\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 115 China Eastern Airlines Corporation Limited(600115) )
Key points
Event: the company released the annual report of 2021. In 2021, the company achieved an operating revenue of about 67.1 billion yuan, a year-on-year increase of 14.5%; The net loss attributable to the parent company was about 12.2 billion yuan, an increase of about 400 million yuan over the loss of the previous year (11.8 billion yuan), which was near the median of the performance pre loss range; The net loss after deduction of non return to parent company is about 13.5 billion yuan, an increase of about 800 million yuan compared with the loss of the previous year (12.7 billion yuan), which is near the median of the performance pre loss range.
China’s aviation demand recovered, and the company’s Chinese route ask rebounded. In 2021, the company’s ask (available seat kilometers) increased by 5.7% over the same period in 2020 and decreased by 40.5% over the same period in 2019. Among them, China’s passenger transport demand recovered well. In 2021, the ask of Chinese routes increased by 15.8% over the same period in 2020 and recovered to 91% over the same period in 2019; The supply and demand of overseas airlines are still low. The ask of international and regional routes in 2021 is only 4.3% and 11.4% of that in the same period of 19 years. The company’s comprehensive seating rate in 2021 was 68.7%, a decrease of 2.83 PCT compared with the same period in 2020 and 14.4 PCT compared with the same period in 19 years. In 21 years, the daily utilization rate of the company’s aircraft was 6.66 hours, an increase of 0.64 hours year-on-year. At the end of December 2021, the company operated 752 passenger planes (excluding business planes), an increase of 3.7% over the end of 2020, higher than the growth rate of the same period last year (0.3%).
Passenger kilometer revenue rebounded, driving the year-on-year recovery of passenger revenue. In 2021, the company’s passenger kilometer revenue was 0.531 yuan (including cooperative route revenue and fuel surcharge), an increase of 7.9% over the same period in 2020 and 1.7% over the same period in 2019. Among them, the passenger kilometer revenue of China, international and regional countries changed by + 11.9%, + 120% and – 17.1% over 2020. Under the influence of comprehensive volume and price, the passenger revenue of the company in 2021 was 54.1 billion yuan, an increase of 10.1% over 2020 and a decrease of 50.9% over 2019.
Revenue from freight business maintained growth. Due to the repeated overseas outbreaks, air cargo still maintains a high degree of scenery. In 2021, the company achieved a revenue of 8.3 billion yuan from cargo and mail transportation, a year-on-year increase of 70.0%, a year-on-year increase of 54.2% in cargo and mail turnover, and a year-on-year increase of 10.1% in revenue per ton kilometer of cargo and mail.
Oil prices rose sharply and the gross profit margin continued to be under pressure. Due to the rigidity of depreciation and maintenance costs, the depreciation and maintenance costs of the company increased by 0.5% and 9.6% year-on-year respectively in 2021; The annual average price of Brent crude oil in 2021 was about US $70.9/barrel, which was significantly higher than that in 2020 (US $43.0 / barrel), putting great pressure on the company’s operating cost. The company’s aviation fuel cost in 2021 increased by 48.8% year-on-year, accounting for about 25.7% of its main operating cost. Based on the above, the company’s main operating cost increased by 13.1% year-on-year in 2021, lower than the revenue growth in the same period. Affected by this, the gross profit margin of the company’s main business in 2021 was – 19.2%, with a year-on-year increase of 1.5pct.
Investment suggestion: the epidemic situation outside China has been repeated, and the recovery of air passenger transport demand has been negatively impacted. We believe that the growth logic and location advantages of head airlines have not changed substantially due to the epidemic situation; With the continuous advancement of covid-19 vaccine / treatment technology, the demand for air passenger transport will gradually recover, and the revaluation of the company’s value is a deterministic event. Based on the longer duration of covid-19 epidemic than expected, we lowered the company’s net profit forecast for 22-23 years to – 7.2 billion yuan and + 2.1 billion yuan respectively (originally – 4.2 billion yuan and + 3.2 billion yuan), and increased the net profit forecast for 2024 by 4.7 billion yuan; Based on the gradual improvement of the company’s fundamentals, maintain the “overweight” rating of the company’s A-Shares and H shares.
Risk warning: the duration of covid-19 epidemic exceeded market expectations; The sharp decline of macro economy leads to the decline of industry demand; Sino US trade frictions continue to ferment, and the RMB exchange rate fluctuates greatly; Crude oil prices rose sharply
