[ET Net News Agency, 2 December 2020] Credit Suisse initiated coverage on TravelSky
Technology (00696) with an "outperform" rating and a target price of HK$23.5.
The research house sees the company as well-positioned to fully capture solid domestic
travel recovery, together with limited competition on regulation, and its strong ties with
Big 3 airlines which have enhanced earning visibility.
Credit Suisse noted twin growth engines (1) core business Aviation Information
Technology (AIT) is set for a more rapid recovery entirely dependent on a recovery of
traffic with advantage on a fixed ASP (air tickets still at a 20% discount); (2) sole full
solutions provider for smart airports to benefit under China's 14th five-year plan, let
alone China target to almost double the number of airports to 450 by 2035.
It expects that TravelSky's earnings should bottom in FY2020 and grow strongly by
277%/20% in FY2021/22, benefitting from traffic recovery and a stable cost structure
(60-65% fixed cost). (KL)