BOCOM expects China Eastern (00581-HK)'s profit situation to improve in half a year. It lowered the company's earnings forecast for this year and next two years to 0.15 yuan and 0.19 yuan per share, corresponding to 0.6 times this year's market account rate, and lowered the company's target price to 2.5 yuan to maintain its “long-term purchase” rating.

According to a report published by BOCOM, downstream demand for crude steel may decline seasonally in the third quarter, but according to figures from the China Steel Association, crude steel production was still high in July, and the problem of overcapacity will continue, driving down steel prices.

Earlier, China Eastern issued a warning for the first half of the year, indicating that the prices of raw materials such as iron ore were high, causing the company's net profit to drop significantly. According to BOCOM, iron ore prices fluctuate less than steel prices, and the current monopoly position of international mining giants is difficult to change. Steel mills will continue to be pressured by the operation of high iron ore prices.