\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 111 Air China Limited(601111) )
The operating income increased and the loss expanded
Air China Limited(601111) issued the 2021 annual report on March 30, 2022. The company achieved an operating revenue of 74.532 billion yuan in 2021, with a year-on-year increase of 7.23% and a decrease of 45.27% compared with 2019; The net loss attributable to the parent company was 16.642 billion yuan, with a year-on-year increase of 2.233 billion yuan; Deducting the net loss not attributable to the parent company was RMB 17.056 billion, with a year-on-year loss of RMB 2.316 billion.
The Chinese market has recovered, international routes have further shrunk, and investment losses have decreased significantly
In 2021, the company’s market revenue, passenger volume and transport capacity in China have recovered. China’s passenger transport revenue increased by 19.13% year-on-year, the passenger volume increased by 3.28%, and the available seat kilometers increased by 7.66%. Affected by the global epidemic situation, the international market has further shrunk significantly. The passenger revenue of international lines decreased by 58.32% year-on-year, the passenger volume decreased by 86.56%, and the available seat kilometers decreased by 77.72%. On the whole, in 2021, the company’s passenger seat rate decreased by 1.75 percentage points year-on-year, the available seat kilometers decreased by 2.32% year-on-year, and the revenue passenger kilometers decreased by 4.74%. However, due to the improvement of income level, the company’s passenger transport revenue increased by 4.65% year-on-year. During the period, the company’s investment loss was 746 million yuan, a significant decrease of 87.39% year-on-year, mainly due to the reduction of investment loss caused by the loss reduction of Cathay Pacific Airlines and Shandong Airlines.
Passenger kilometer revenue improved and freight revenue increased significantly
Passenger transport: the company’s revenue per passenger kilometer in 2021 was 0.5574 yuan, with a year-on-year increase of 9.85%, including 0.5318 yuan for China, an increase of 13.99%, and 1.3869 yuan for international routes, with a year-on-year increase of 69.2%, which was due to the sharp reduction of international flights. Freight transportation: in 2021, the company increased the investment in freight transportation capacity, and achieved an annual revenue of 11.113 billion yuan, an increase of 29.93% year-on-year, an increase of 93.88% compared with 2019, accounting for 15% of operating revenue, an increase of 2.6 percentage points year-on-year.
Fuel costs rose sharply and exchange gains fell sharply
Oil prices led to rising costs. In 2021, the operating cost of the company was 85.844 billion yuan, with a year-on-year increase of 13.50%, which was greater than the growth rate of revenue, resulting in the decline of gross profit margin. Due to the sharp rise in the cost of fully mechanized oil mining in China during the period and the increase in the number of flights of the company, the cost of aviation oil increased significantly by 39.73% year-on-year to 20.704 billion yuan. The cost of oil deduction was 65.140 billion yuan, a year-on-year increase of 7.11%, basically equivalent to the growth rate of revenue. The sharp decline in exchange earnings led to a surge in financial expenses. Compared with 2020, the appreciation rate of RMB slowed down in 2021, and the exchange gain during the period was 1.235 billion yuan, a significant year-on-year decrease of 65.72%, so the financial expenses increased by 215.18% year-on-year.
It is expected that the performance repair will be accelerated in 2022 and profitability will be realized in 2023
As the leader of AVIC, the company has excellent operation and management level and great profit elasticity. Under the background of the mismatch between supply and demand in the civil aviation industry during the 14th Five Year Plan period, it is expected that the passenger occupancy rate will increase and the revenue level of the airline company will improve. However, affected by the unstable global epidemic situation and the sharp rise in oil prices, it is expected that the company will still be difficult to make a profit in 2022. We expect that in 2023, international routes are expected to begin to be liberalized, and the company will benefit from the double dividend of the growth of international line revenue and the continuous improvement of China line revenue. It is estimated that the net profit of 22-24 years will be -77.6/31.2/7.04 billion yuan, maintaining the “buy” rating.
Risk tip: the recovery of the epidemic in various places is less than expected, the oil price rises sharply, the RMB depreciates sharply, China’s economic growth is less than expected, and the investment loss increases significantly
