[ET Net News Agency, 10 September 2019] Citi Research trimmed its target price for Air
China (00753) to HK$8.6 from HK$9.6 and maintained its "buy" rating.
The research house said Air China reported weak 1H results with recurring net profit
falling 20%, if excluding one-off & FX losses, mainly dragged by weak performance in 2Q
under lower yield and rising cost pressure.
Per management guidance, Citi estimated international ASK and regional ASK to be
flattish and -4% respectively in 2H (versus 9%/17% in 1H), due to high base and political
events disruptions respectively. With factoring in Citi's latest FX/oil forecasts and
lowered yield assumptions, the research house's cut its 2019-2021 recurring earnings
forecasts by 33%/11%/4% respectively. (KL)