Air China (753 HK): Effects of Capacity-Control and Price-First Strategies continued December 14, 2017 1041

Investment Summary

  • 15% Increase in Profit of 2017Q3
  • Remarkable Effects of Capacity-Control and Price-First Strategies
  • It will be helpful to benefit from the economic recovery in Europe to operate jointly with Lufthansa

Valuation & Investment thesis

According to the latest result, we revised our estimate 2017/2018 net profit of AC to be 9.68/9.55 billion RMB; EPS to be 0.67/0.66-yuan RMB. The target price is adjusted to HKD8.67, estimates 11x/11x P/E and 1.45/1.31x P/B in 2017/2018. “Accumulate” rating is given.

About the author

Profile photo of Zhang Jing

Zhang Jing
Phillip Securities (HK)

Bachelor Degree in Tongji University of Engineering; Master Degree in East China Normal University of finance. Currently covering the automobile and air sectors. She has years of experience in investment research and is good at combining analysis for the companies with industry prospects.

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