\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 111 Air China Limited(601111) )
Event:
Air China Limited(601111) released the first quarterly report of 2022
In terms of business, in the first quarter of 2022, the company transported 110783 million passengers / yoy-28.75%, equivalent to 39.54% of the level in 2019; Ask and RPK decreased by 22.22% and 27.83% respectively year-on-year in 2021, equivalent to 39.77% and 29.93% of the level in 2019; The occupancy rate was 61.32% / yoy-4.76 PCT, a year-on-year decrease of 20.16 PCT in 2019.
In terms of finance, the company realized an operating revenue of 12.918 billion yuan / yoy-11.41% in the first quarter of 2022, 39.68% of the same period in 2019; The net profit attributable to the parent company was -8.9 billion yuan / yoy-43.37%, and the net profit not attributable to the parent company was -8.962 billion yuan / yoy-42.23%, a year-on-year decrease of 426.86% and 438.14% respectively.
Key investment points:
The rebound of the epidemic impacted the recovery process, and the revenue decreased by 1.663 billion year-on-year
Benefiting from the good demand in the peak season of the Spring Festival, the cumulative passenger volume of the company from January to February increased by 10.93% year-on-year, but the epidemic rebounded in many local places in March, resulting in a sharp year-on-year decline of 70.20% in passenger volume in that month. Overall, in the first quarter, the company's passenger volume and ask decreased by 28.75% and 22.22% year-on-year respectively. Affected by this, the revenue decreased by 1.663 billion yuan year-on-year, down 11.41% year-on-year.
High oil prices dragged down cost performance, and operating costs increased slightly by 447 million
Although the company's transportation capacity investment decreased in this period, due to the year-on-year increase of about 60% in the average price of oil distribution, the cost side of the company was dragged down. During the reporting period, the operating cost of Air China increased slightly by 447 million yuan, up 2.32% year-on-year, and cask increased by 31.56% year-on-year to 0.71 yuan. On the expense side, benefiting from the slight appreciation of RMB, the financial expenses of the company in the current period decreased by 365 million yuan year-on-year, a year-on-year decrease of 22.57%.
In addition, the company's income tax expense in the current period was - 570 million yuan, a significant increase of 1.121 billion yuan year-on-year, driving the increase of the scale of loss. The net loss attributable to the parent company in the current period reached 8.9 billion yuan, a year-on-year increase of 2.692 billion yuan.
Demand bottoming performance continues to be under pressure, and the medium and long-term starting point may be opened this year
Under the influence of repeated epidemics, high oil prices and other factors, the fundamentals of the aviation industry are still at the bottom of the large cycle level, and the demand bottom performance is under pressure. Due to the strong infectivity of the mutant virus Omicron, the local epidemic was more sporadic or normal in the first half of 2022. Considering the reality of China's per capita medical resources and immune barrier, we expect to wait until the third quarter before we can look forward to and release relevant matters. We are confident that travel will return to normal in the future, but the impact and duration of the epidemic have repeatedly exceeded expectations.
With the official announcement of the diagnosis and treatment plan for novel coronavirus (trial version 9), China's anti epidemic has entered the second half of the year. This year is expected to usher in the medium and long-term starting point of the aviation industry, but the inflection point still needs to wait patiently. In the current round of large cycle caused by covid-19 epidemic, aviation stocks have two logics: Valuation repair and supply-demand elasticity. As the only flag carrier in China, Air China sits at the first national capital airport and has the best time resources and route network. Affected by the recent rebound of local epidemic and industrial safety accidents, the demand for civil aviation has been restrained, and the prosperity of the industry is at a low level. The company is expected to fully benefit from the upward stage of the cycle.
Profit forecast and investment rating: it is estimated that the company's revenue from 2022 to 2024 will be 82.45 billion yuan, 121912 billion yuan and 150102 billion yuan respectively, and the net profit attributable to the parent company will be -12.527 billion yuan, 5.299 billion yuan and 11.577 billion yuan respectively. The corresponding PE from 2023 to 2024 will be 25.60 times and 11.72 times respectively, maintaining the "overweight" rating.
Risk tips: (1) permanent loss risk: Bankruptcy caused by cash flow fracture and passive substantial dilution of shares caused by huge additional issuance at the bottom; (2) Periodic impact risk: at the macro level, the economy fluctuates greatly, the epidemic breaks out again, and major natural disasters, vaccination and related drug research and development are blocked; In terms of industry, major policy changes, aviation accidents, intensified industry competition, etc.
