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密集大手笔融资"加油" 南航再发150亿公司债

证券时报 ·  Nov 20, 2020 01:27

Although the domestic aviation industry is gradually recovering from the impact of the epidemic, it can be seen from the recent intensive financing actions of the head airlines that the aviation industry has a demand for repairing cash flow.

Intensive financing.

A clear need for cash flow.

On the evening of November 19th, China Southern Airlines (600029) announced that the company plans to publicly issue no more than 15 billion yuan of corporate bonds, with a term of no more than 10 years (including 10 years). After deducting the issuance costs, the funds raised will be used for legitimate and compliant purposes such as supplementing working capital, investing in project construction, and repaying bank loans.

Since October, China Southern Airlines has already had two large-scale financings. On November 9th, China Southern Airlines issued no more than 10 billion yuan of short-term corporate bonds approved by the CSRC. On October 15th, China Southern Airlines issued 16 billion yuan of convertible bonds for the purchase and maintenance of aircraft and aviation materials, the introduction of standby engine projects, and the supplement of working capital. This amount refreshed the record of the scale of convertible bond financing by domestic airlines. The southern airlines convertible bonds were listed on November 3rd, and the current price is 125.85 yuan. Data shows that since this year, Southern Airlines has had more than 20 direct financing activities, including short-term financing, medium-term notes, and other types of financing activities.

As of the end of the third quarter of this year, Southern Airlines' operating net cash flow was 3.977 billion yuan, compared to 24.776 billion yuan in the same period last year, mainly due to the impact of the epidemic and the reduction in passenger transportation revenue. The net cash flow from financing activities was 12.119 billion yuan, compared to -19.304 billion yuan in the same period last year, mainly due to the increase in non-public stock issuance, loans acquired, the issuance of medium-term notes and corporate bonds. According to the latest plan on the 19th, the varieties of corporate bonds of this issuance include general corporate bonds, green corporate bonds, poverty alleviation corporate bonds, and Greater Bay Area special corporate bonds. The term does not exceed 10 years (including 10 years), and can be a single-term or mixed-term product. The funds raised from this bond issuance will be used for legitimate and compliant purposes such as supplementing working capital, investing in project construction, and repaying bank loans after deducting the issuance costs.

The target investors of this bond issue are professional investors, and it will be allocated under the underwritten competition among professional investors. The issuer and the bookkeeping manager will allocate the bonds based on the results of the bookkeeping. This bond issue will not be given priority to the shareholders of the company. The announcement also mentioned debt service support measures, and when the expected bond principal and interest cannot be paid on time, the following debt service support measures will be taken at least:(1) Do not distribute profits to shareholders; (2) Defer the implementation of capital expenditures such as major external investment, mergers and acquisitions, etc.; (3) Reduce or suspend the salaries and bonuses of the company's directors and senior management; (4) The company's main responsible personnel shall not be transferred.

Third quarter report shows a turnaround.

Steady recovery in the aviation industry.

Affected by the COVID-19 pandemic, global aviation industry chain companies have all undergone severe tests this year.

China Southern Airlines is one of the three major state-owned backbone air transportation groups in China. In the first three quarters of 2020, China Southern Airlines achieved revenue of 65.35 billion yuan, a year-on-year decrease of 43.98%; a net loss of 7.463 billion yuan, a profit of 4.078 billion yuan in the same period last year. China Southern Airlines stated that due to the huge losses caused by the epidemic to the aviation transportation industry and the global economy, the group's 2020 full-year operating performance is expected to be significantly affected.

However, China Southern Airlines turned its losses into profits in the third quarter, realizing operating income of 26.386 billion yuan and net profit of 711 million yuan during the period. It is the only airline among the big three to achieve quarterly profit. According to the latest operating data released in October, China Southern Airlines had a good performance, with domestic passenger transportation capacity and passenger turnover both increased year-on-year. Industry insiders analyzed that China Southern Airlines achieved quarterly profit among the big three airlines, one of the main factors being the contribution of freight business to performance. After China Eastern Airlines and Air China's mixed reform, freight logistics has been removed from the listed company's income statement.

It is worth mentioning that the recent cargo mixed reform plan of China Southern Airlines has also been announced. On the evening of November 10th, CTS INTERNATIONAL LOGISTICS CORPORATION(603128) announced that China Southern Airlines' wholly-owned subsidiary, Southern Air Cargo & Logistics Co., Ltd., plans to carry out mixed ownership reform and publicly list on the Shanghai United Property Rights Exchange, and publicly solicit 1-15 strategic investors through capital increase and expansion. The released equity proportion does not exceed 49.5% (including employee shareholding).

Looking at the overall industry recovery, with the gradual stabilization of domestic epidemic control, China's aviation industry is showing a steady and recovering development trend. According to the Civil Aviation Administration data, in October, civil aviation completed a total of 50.323 million passenger transport, a recovery rate of 88.3% compared to the same period last year; completed cargo and mail transport of 621,000 tons, a year-on-year decrease of 6.8%. The number of domestic passenger flights operated was 408,000, a year-on-year increase of 8.1%.

According to the latest research report from Htsc, the major listed airlines in A shares (Air China, China Southern Airlines, China Eastern Airlines, Spring Airlines, and Juneyao Airlines) continue to increase their domestic line capacity allocation in October, with a 13.6% increase in domestic supply, and demand being slightly lagged behind but still increasing by 4.5%. The domestic passenger load factor was 77.9%, down 6.7%. It is expected that the domestic air travel demand will continue to have room for improvement in the fourth quarter to the Spring Festival next year. The RMB exchange rate has been continuously appreciating relative to the US dollar, with an appreciation of 3.0% since the fourth quarter, and the low oil price support may continue to enable the airline's net income to recover. In addition, the breakthrough in vaccine development may become an important catalyst for the recovery of international air travel, further promoting the improvement of airline demand and sector valuation.

The translation is provided by third-party software.


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