Jefferies Financial cited that Cathay Pacific management reemphasized in a recent meeting that the company's operating performance is in line with earlier comments on full-year performance in 2023. Jefferies believes that Cathay Pacific's passenger revenue performance is consistent with the company's management performance and previous forecasts in the previous fiscal year, with passenger revenue rates on some routes down 10% year-on-year. As for passenger capacity, it has recovered to 80% before the epidemic, and the goal of achieving 100% recovery in the first quarter of 2025 continues. The management said that the performance of advance ticket bookings this summer is strong, benefiting from suppressed passenger demand and strong demand for business travel. However, Cathay Pacific's strategy to increase the number of transit passengers in the future may have a negative impact on its passenger revenue rates. The Bank expects that Cathay Pacific's operating profit for the current fiscal year has peaked, but its profitability performance will benefit from the profit recovery of Air China Limited. In order to reflect the above factors and the rise in employee costs, Jefferies lowered Cathay Pacific's target price from HKD 10.5 to HKD 9.8 and maintained a 'buy' rating.