中国东航(600115)公司简评报告:国内外航线修复 曙光将至 扬帆起航

China Eastern Airlines (600115) Company Brief Review Report: The Dawn of Domestic and Foreign Route Repairs Will Set Sail

首創證券 ·  04/11  · Researches

Incident: The company released its 2022 annual report, achieving revenue of 46.111 billion yuan for the full year of 2022, a year-on-year decrease of 21.016 billion yuan (+-31.31%); realized net profit of 37.386 billion yuan, a year-on-year loss of 25.172 billion yuan; net profit after deducting non-return to the mother was 37.953 billion yuan, an increase of 24.412 billion yuan over the previous year.

In 2022, the company's revenue was 46.111 billion yuan, a year-on-year decrease of 21.016 billion yuan (-31.31% year on year). Revenue was severely impacted. In 2022, the company's passenger traffic revenue was RMB 35.04 billion, a year-on-year decrease of 35.30%, accounting for 79.70% of the company's air transportation revenue; passenger transportation turnover was 61287.67 million passenger kilometers, a decrease of 43.67% over the previous year. Among them, domestic route revenue was RMB 30.571 billion, a year-on-year decrease of 39.60%, accounting for 87.33% of passenger revenue; international route revenue was RMB 4.185 billion, up 30.86% year on year, accounting for 11.96% of passenger revenue; regional route revenue was RMB 248 million, a year-on-year decrease of 16.22%, accounting for 0.71% of passenger revenue. In 2022, the company's cargo revenue was RMB 7.770 billion, a year-on-year decrease of 6.49%, accounting for 17.69% of the company's air transportation revenue. The cargo and mail transport turnover was 2608.93 million tons/km, a decrease of 23.12% over the previous year.

In 2022, operating costs were RMB 74.599 billion, a year-on-year decrease of 6.80%. Due to the influence of the external environment, passenger travel volume declined. In 2022, the company's aircraft fuel costs were RMB 22.230 billion, an increase of 7.95% over the previous year, mainly due to the reduction in the company's flight volume, which reduced fuel volume by 37.29% year on year, and reduced aviation fuel costs by RMB 7.896 billion. Due to the rise in crude oil prices, the average aviation fuel price increased 67.42% year on year, increasing aviation fuel costs by RMB 8.952 billion.

February data shows that the civil aviation industry has recovered its operations, the 23 summer/fall aviation season kicks off growth, and capital expenditure increases capacity to ensure competitiveness. In February 2023, the company's passenger revenue was 11565.6 million kilometers per kilometer, +42.72% year on year. Plans for the summer and fall season were announced on the 23rd. China Eastern Airlines time volume was -9% compared to the same period last year, compared to +5% in 2019, with Shanghai accounting for 46.11% at its main base. As of February 2023, China Eastern Airlines operated a total of 778 aircraft, an increase of 13.8% over 2019. The estimated capital expenditure from 2023 to 2025 is about RMB 12.741 billion, RMB 27.851 billion, and RMB 13.516 billion respectively; capital expenditure will increase to improve market competitiveness.

Investment advice: With the recovery of airline business performance, both domestic and overseas routes are showing a recovery trend. We expect net profit to return to the mother in 2023-2025 to be 21.1/120.8/15.0.5 billion yuan. Based on the latest closing price, PE is 57.1/10.0/8.0. Maintain the company's “buy” rating.

Risk warning: economic and trade environment, geopolitics, epidemic risk; policy and regulation risk; safe operation risk; risk of fluctuating aviation fuel prices; risk of exchange rate fluctuations; risk of interest rate changes.

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