[ET Net News Agency, 20 July 2018] Credit Suisse lowered its target price for China
Eastern Airlines (CEA)(00670) to HK$6.5 from HK$7.8, and reiterated its "outperform"
rating.
Despite the intensified RMB depreciation and high oil price having clouded earnings
outlook, the research house is positive on the sector given the favourable demand-supply
dynamic and yield enhancement on pricing reform.
Credit Suisse said CEA is based in Shanghai airports which should allow it to benefit
further from the airfare hikes going forward. CEA also differentiates from its peers by
actively exploring beyond its core operation from full service carriers (FSCs) to
low-cost-carrier (LCCs), cooperating with global peers (e.g. Delta Airlines in the US) and
the leading online travel agency (OTA) to optimise efficiency and extend customer reach.
Credit Suisse trimmed its earnings estimate by 42-57% for FY2018-19. (KL)