[ET Net News Agency, 19 July 2018] Credit Suisse cut its target price for Air China
(00753) to HK$9.5 from HK$11.6, and reiterated its "outperform" rating.
The research house is constructive about the aviation industry outlook on (1) solid air
demand with further penetration as a driver, (2) supportive policy mix on pricing reform
and marketisation and (3) contained flight slot supply that would gradually ease on better
punctuality and regional airport coordination over time.
Credit Suisse likes Air China for its quality flight route structure that helps capture
benefits from the price hikes. Among the Big 3 airlines, it sees healthier ASK supply
growth for Air China as compared with peers year-to-date.
Factoring in new yield assumption, latest oil price forecast and RMB/USD exchange rate,
Credit Suisse trimmed its earnings estimate by 25-47% for FY2018-19. (KL)