中国东航(600115):22年亏损扩大至374亿元 静待盈利弹性释放

China Eastern Airlines (600115): Losses expanded to 37.4 billion yuan in '22, waiting for profit flexibility to be released

浙商證券 ·  04/01  · Researches

Key points of investment

According to the 2022 annual report, the company achieved operating income of 46.1 billion yuan/ -31% in 2022, and net profit of -37.4 billion yuan to the mother (-12.2 billion yuan in '21). Among them, 22Q4 revenue was 10.3 billion yuan/ -30%, and net profit of the mother was -9.3 billion yuan (21Q4 was -4.1 billion yuan).

Operating data: Net increase of 23 aircraft in '22, ASK and RPK were -40% and -44%, respectively (1) The fleet size at the end of '22 was 775 (excluding business jets), +3.1% year-on-year, with 34 new aircraft added, 11 exited, and a net increase of 23 aircraft throughout the year.

(2) The ASK, RPK, and passenger occupancy rates in 2022 were -40.1%, -43.7%, and -4.0pct, respectively -64.4%, -72.4%, and -18.4pct compared to 19.

Revenue side: Passenger kilometer revenue in '22 increased 15% year on year 19. The company's passenger transportation revenue in '22 was 35 billion yuan, -35% year on year; freight revenue was 7.77 billion yuan, -6.5% year on year. In terms of unit revenue, China Eastern Airlines earned 0.602 yuan per passenger kilometer in '22, +13.4% year on year 22 and +15.3% year on year 19. Among them, passenger kilometer revenue on domestic routes was 0.549 yuan, +7.9% year on year 22, +1.9% year on year 19; passenger kilometer revenue on international routes was 2.1 yuan, +17.5% year on year 22, +344% year on year 19; revenue from passenger kilometers on regional routes was 1.04 yuan, +39.8% year on year 22 and +39.8% year on year 19.

Cost side: Dragged down by high oil prices and low utilization rates, unit costs rose sharply year over year Cost side: the company cost 0.78 yuan per unit of ASK in 2022, +56% year on year. Among them, in terms of aviation fuel costs, the average inbound duty-paid price of aviation kerosene imports in '22 was 7,540 yuan/ton, +73% over the same period last year, causing the company's ASK fuel cost to increase 80% over the same period last year to 0.23 yuan. In terms of non-oil costs, the ASK cost per unit of oil withheld is 0.54 yuan, +47% over the same period last year, mainly hampered by low utilization.

Expense side: ASK sales expenses per unit in '22 were 0.023 yuan, +46% compared to '22, and -0.3% year-on-year.

The unit ASK management fee was 0.038 yuan, +81% year on year 22 and +171% year on year 19. In terms of financial expenses, RMB depreciated 9.2% at the end of '22 compared to the end of '21, and the company's exchange profit and loss in '22 was 2,687 billion yuan. (Exchange earnings of $1,619 billion in '21)

Investment advice: The beginning of the aviation cycle has begun. Profit elasticity is impressive in 23-26 with price increases expected. The company's fleet introduction plan is a net increase of +22, +27, -2, and +22 aircraft. The China Eastern Airlines fleet size CAGR is expected to be 2.2% in 19-25. The growth of the industry's capacity supply decelerated definitively during the 14th Five-Year Plan period, and it is expected that there will be a clear mismatch between supply and demand in the future as demand recovers. The company has the advantage of having two main bases in Shanghai. The Beijing-Shanghai line has the highest share of the most popular business line. In anticipation of rising ticket prices, the company's profit elasticity is considerable. We expect the company's net profit to be 26.02 billion yuan, 129.1 billion yuan, and 13.31 billion yuan respectively in 23-25, maintaining the “increase in holdings” rating.

Risk warning

The recovery in travel demand fell short of expectations; oil and foreign exchange risks; emergencies, etc.

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