Air China (601111) coverage report for the first time: flag carrier core airport
The only flag carrier in China with a premium brand value.
Air China is the only civil route in China that carries the national flag, and has been ranked among the “World Top 500 Brands” in the World Brand Lab for 12 consecutive years.
Air China owns Shenzhen Airlines, Dalian Airlines, Beijing Airlines, Inner Mongolia Airlines, Macau Airlines, etc., shares in Cathay Pacific, Shandong Airlines and other companies, is the largest shareholder of Shandong Airlines Group.
Revenue of Air China in 2018 was 1,367.
74 ppm, an increase of 12 in ten years.
7%, net profit attributable to mother 73.
36 ppm, an increase of ten years.
The card is located at the core airport, and the high-quality unit of the route has high returns.
Air China’s available seat kilometer revenue (RASK) is the highest of the three major airlines and reaches zero.
4402 yuan, mainly due to its quality routes.
China Airlines has formed a four-sided diamond-shaped network with Beijing Super Hub, Chengdu International Hub, and Shanghai and Shenzhen International Gateways as its core.
Calculated by the number of flights, Air China ‘s first-line and new-line accounts for 61% of its total flights.
94%, while China Eastern and China Southern were 54.
21%; For price-insensitive business travelers, more and better flight schedules are the key to improving revenue.
Air China is the first carrier on China-US and China-Europe routes. International air rights cannot be copied, which forms Air China’s unique competitive advantage.
The capacity growth of various airline companies in the international market has decreased, and the unit revenue of international routes will increase in 2019.
Price priority strategy and strong cost control ability.
Domestic flights are market-priced, and Air China ‘s core routes account for a relatively high proportion, benefiting more from the increase. In 2018, Air China adjusted the freight rates of 57 domestic routes to increase revenue by approximately US $ 1.4 billion.
Air China has fully implemented the price priority strategy initially, and its domestic revenue has maintained a clear advantage; the rich two-cabin price gradient has expanded the breadth of international two-cabin passengers, and the passenger load factor of two-cabin has continued to increase, from 52 in 2015.
1% to 60 in 2018.
The marketing model has been transformed and upgraded. In 2018, Air China’s additional revenue will increase by 3 every year.
2 ppm, an increase of 45 in ten years.
Air China strengthened its cost control, introduced additional prudence, continued optimization of its structure, continued increase in the proportion of wide-body aircraft, and combined fine-grained control of computer fuel consumption. Fuel efficiency continued to improve and unit costs continued to fall.
With the opening of Daxing Airport, Air China Capital Airport is expected to increase at all times.
With the transfer of China Eastern Airlines Group and China Southern Airlines Group, Air China Group’s domestic market share in Capital Airport increased to 70%, which is conducive to enhancing Air China’s pricing power on Capital Airport routes, and is expected to divert the share of other airlines with more commercial passenger flights.
Daxing Airport will be put into production in 2019. Air China is expected to obtain a new increase in Capital Airport after 2022. With this layout of London 杭州夜网论坛 Airport, the passenger unit price of Capital Airport is expected to exceed that of Daxing Airport, and Air China will benefit more.
Investment strategy: We think that there is a lot of room for improvement in oil exchanges, and the impact of crude oil is relatively small. Operating leases are included in the table, and exchange rate sensitivity is enlarged. The Civil Aviation Development Fund will be halved to increase Air China ‘s profits.
We forecast Air China’s net profit attributable to its mother to be 102 in 2019-2021.
2.9 billion, 129.
820,000 yuan, 167.
09 million yuan, an increase of 39 in ten years.
7%.We consider the quality of Air China’s routes to be the leader in the industry and give us a target price of 12.
6 yuan, the first coverage given a “buy” rating.
Risk reminders: 武汉夜网论坛 Macroeconomic growth exceeds expected risks, the risk of RMB depreciation, and the risk of rising oil prices.