Main points of investment
Huaxia Airlines 2023 third quarterly report: Q3 reversed losses, return to the mother net profit of 55 million yuan according to the third quarter of China Airlines 2023, the company achieved operating income of 3.85 billion yuan in the first three quarters of 2023, + 90% compared with the same period of 22 years; the net profit of return to the mother was-700 million yuan, the loss narrowed by about 810 million yuan over the same period of 22 years. Among them, 23Q3, the company realized operating income of 1.64 billion yuan, + 5% compared with the same period in 19 years, and returned to its mother with a net profit of 55 million yuan, turning a loss into a profit in a single quarter.
Operational data: 23Q3 occupancy rate compared with the same period in 19 years-2.7pct, the gap is further narrowed
Fleet size: the company at the end of 23Q3 has 68 aircraft, a net increase of 1 A320 aircraft over the end of Q2 and 3 aircraft over the end of 22.
ASK: 23Q1, 23Q2 and 23Q3 are-0.1%, + 1.6% and + 9.2% respectively compared with the same period in 19 years.
RPK:23Q1, 23Q2 and 23Q3 are-13%,-2% and + 6% respectively compared with the same period in 19 years.
The occupancy rate of 23Q1, 23Q2 and 23Q3 was 70.6%, 74.8% and 80.1% respectively, which was-10.2%,-3.0% and-2.7% respectively compared with the same period in 19 years.
Income analysis: Q3 unit customer income basically returned to 19Q3, unit cost year-on-year + 11% income end: 23Q3, company operating income 1.64 billion yuan, an increase of 5% compared with 19Q3; unit ASK income was 0.508 yuan,-4% compared with the same period in 19 years, month-on-month + 20%; unit RPK income was 0.634 yuan, compared with the same period in 19 years-0.4%, month-on-month + 12%.
Cost side: 23Q3, the company's operating cost is about 1.46 billion yuan, an increase of 22% over the same period of 19Q3. The operating cost per unit ASK is 0.452 yuan,-4% month-on-month, and + 11% compared with the same period in 19 years, mainly because the oil price has risen and the utilization rate has not yet recovered. In terms of oil prices, the average CIF customs value of 23Q3 China's aviation kerosene imports is 6555 yuan per ton, up 7% from 23Q2 and 33% from 19Q3.
Cost side: 23Q3, the company's sales expenses and management expenses are 0.66 yuan and 64 million yuan respectively, which are + 43% and + 14% respectively compared with the same period of 22 years. The unit ASK sales expenses and unit ASK management expenses are 0.02 and 0.02 yuan respectively, which are + 2% and + 30% respectively compared with the same period in 19 years. The financial cost of Q3 is 105 million yuan, and the change in the exchange rate of the US dollar against the RMB at the end of the third quarter caused the RMB to appreciate by about 0.6% compared with the end of the second quarter. Based on the scale of 2023H1 exchange losses, we expect the company's Q3 to generate exchange gains of about 0.2 to 30 million yuan.
Profit forecast and investment suggestion
The company's flight volume is gradually back on track, benefiting from the aviation cycle, the performance inflection point has appeared. We estimate that the 23-25 net profit of the company will be-7.9,4.8 and 910 million yuan respectively, maintaining the "overweight" rating.
Risk tips: demand is lower than expected, oil prices and exchange rates fluctuate sharply.