According to a research report released by Bank of America Securities, Cathay Pacific (00293.HK) passenger revenue in the first half of 2024 is normalizing, in line with previous business guidance. In addition, under the promotion of seasonal factors, student flow, and stable business demand, Cathay Pacific's advance booking performance is strong.

The bank expects that Cathay Pacific will maintain a shareholder return on investment (roi) of 11%-14% during 2024-2026 by improving unit costs, reaching a bottom in cargo revenue, and normalizing the contribution of Air China (00753.HK). The bank is particularly concerned about the catalysts of the group, with the potential for profit and dividend surprises in the second half of the year's peak season, and the current return on investment of Cathay Pacific for the 2024 fiscal year is 6.4%.

In addition, Bank of America Securities lowered its earnings per share forecast for Cathay Pacific's 2024 fiscal year by 5% to reflect the weakening contribution of Air China. However, at the same time, the bank raised its earnings per share forecast for Cathay Pacific's 2025-2026 fiscal years by 15% due to the improvement in the cargo cycle outlook. The target price was raised from HKD 11.5 to HKD 12, and the 'buy' rating was reiterated. (js/k)

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