GLONGHUI, September 5 | UBS published a research report stating that the market seriously underestimated Cathay Pacific's cash generation and shareholder return potential. According to the bank, even after the company redeems preferred shares, warrants, and convertible bonds issued in 2021, it may still generate cumulative free cash flow exceeding 62% of market value by 2026. As leverage ratios are consistent with history, it is anticipated that there is potential for higher shareholder returns, including special dividends. The bank lowered the Group's capital expenditure forecast for 2023-26 from $15 billion per year to $11 billion per year, increasing the profit forecast by 5 to 26%. Accordingly, the target price was raised from HK$10.5 to HK$11.5, and the rating was “buy”. The bank said that so far this year, the company's stock price performance has lagged behind other full-service operators in the Asia-Pacific region. Profit recovery is still higher than expected due to higher passenger transport yields, while freight yields also remain good. At the same time, with the Group introducing measures to increase labor supply and retain talent, the risks associated with labor shortages seem manageable.