At the dark moment of the industry, the cash flow pressure of airlines is huge. 1) Operation end: low traffic volume + high oil price, and the operation of the whole industry is at the lowest level since the epidemic. In April, the number of flights fell by about 80% compared with the same period in 21 and 19 years, and the seating rate fell to 50 ~ 55%, which is the lowest point after the initial stage of the epidemic and the local Chinese New Year in 20 years. It lasted for a long time and exceeded that time. Superimposed with ultra-high oil prices, the airline’s operation is facing the most difficult period since the epidemic; 2) The airline company has huge cash flow pressure. Since the outbreak, the accumulated losses of the whole industry have reached 211.1 billion, and the asset liability ratio of airlines has generally increased significantly to about 80%. Under the extreme assumption that all airlines’ planes stop, it is estimated that the average daily comprehensive expenditure of the three airlines is about 150000, which corresponds to the cash outflow of the whole industry of about 17 billion per month. For small airlines, the cash flow pressure is huge.
If the extreme epidemic continues, unlisted private airlines may have large variables, and their operation deserves attention, and HNA department also needs to pay further attention to the progress of its restructuring derivatives. 1) There are 30 airlines under the three major airlines and central enterprises / provincial state-owned assets holding airlines, with transportation capacity accounting for 72.4%. In view of the background of central enterprises or provincial governments, the shareholders have obvious advantages in financing capacity, credit line and credit rating, and the overall risk is small; 2) There are 9 listed private airlines (except HNA) / provincial-level state-owned assets holding more than 20% shares / municipal state-owned assets holding airlines, accounting for 10.0%. Listed airlines have relatively good credit conditions and financing ability, and state-owned assets holding will also have strong support for airlines. However, due to local financial constraints and the importance of provincial-level state-owned assets, it is expected that the financing ability of airlines is slightly worse than that of the first two types of airlines; 3) There are 4 unlisted private airlines, accounting for 3.0%. The financing channel is relatively single, relatively weak in credit and credit rating, and relatively poor in financing ability; 4) There are 12 HNA departments, accounting for 14.6%. There is still great uncertainty in the derivative matters of subsequent reorganization, and the future trend remains to be observed. There may be great variables in the subsequent equity of some local participating airlines.
The civil aviation industry may be brewing a new round of changes, and the next few months may be an important observation window for the industry. 1) There were two waves of centralized integration in the history of civil aviation: around 2002, according to the civil aviation system reform plan, the aviation departments directly under the Civil Aviation Administration were jointly restructured to form three major airlines; After the financial crisis in 200910, a large number of private airlines and local airlines integrated into the three major airlines or went bankrupt. Historically, the industry integrators were all state-owned or local large airlines, and the large airlines themselves held part of the equity of the integrated airlines, and then obtained the controlling right through increased shareholding. There was no precedent for the integration of airlines with full private capital background into large airlines, while the equity changes of private airlines were mostly taken over by local state-owned capital; 2) At present, it is impossible to clearly give the follow-up evolution path of the industry, the next few months or an important observation window period of the industry. From the perspective of regulators, we will strive to maintain the current stability of the industry from the perspective of ensuring people’s livelihood and stabilizing the industry team; From the perspective of enterprise operators, all airlines are currently in the stage of continuous and serious blood loss. Even for local holding airlines, finance is also facing great pressure, and it is obviously more difficult for pure private airlines with poor financing ability; From the perspective of potential integration / acquirers, for the three major airlines or large local airlines, they are also in the stage of relatively tight funds, and they have no spare power to carry out integration and acquisition; At the local government level, under the continuous impact of the epidemic, the financial pressure of local governments at all levels has intensified. Under the background of unclear market environment and the impact of the epidemic, the ability and willingness to acquire and control airlines are insufficient.
Investment proposal and investment object
Optimistic about the cyclical elasticity of the aviation sector after the epidemic, pay attention to the industry or brewing a new round of changes. The investment logic of this round of aviation stocks: the reversal of supply and demand drives the double rise of seat rate and ticket price, and promotes performance elasticity. 1) Supply side: low growth of aircraft supply + loss of operators such as flight attendants + impact of events and other factors, and the sharp speed reduction of the industry is clear. 2) Demand side: the demand is strong and resilient, so there is no need to worry too much about the aviation demand after the epidemic; 3) Price elasticity: the reversal of supply and demand drives the overall volume and price to rise together. After several price increases on the superimposed core routes, the ticket price ceiling has been greatly raised. Under the background of tight supply and demand, the ticket price elasticity of airlines can be expected. 4) Under extreme epidemic pressure, a new round of changes may be brewing in the industry. In the coming months or an important observation window period of the industry, the industry may be integrated / cleared.
Investment suggestion: the direction of epidemic repair is determined, and the time point is uncertain. At present, it is gradually entering a new round of layout period. It is suggested to pay attention to Air China Limited(601111) ( Air China Limited(601111) , not rated), as well as private airlines Spring Airlines Co.Ltd(601021) ( Spring Airlines Co.Ltd(601021) , overweight), China Express Airlines Co.Ltd(002928) ( China Express Airlines Co.Ltd(002928) , not rated).
The risk indicates that the macro-economy is less than expected, the impact of the epidemic is more than expected, the impact of the air crash is more than expected, the policy is less than expected, and the calculation deviation of relevant assumptions is at risk
