[ET Net News Agency, 11 September 2019] BofA Merrill Lynch trimmed its target price for
China Southern Airlines (CSA)(01055) to HK$5.35 from HK$5.5 and maintained its "buy"
rating.
The research house said CSA's domestic traffic from 2Q saw weakness or even declines in
some markets due to short term macro risks combined with supply control from the regulator
due to weak demand. International demand in 1H was strong with capacity growing double
digits largely on seat densification and 2018 new routes. Pricing in 1H was also good
because: (1) cut weaker yielding (Australia - Sydney, and Melbourne) routes so Australia
overall is doing better; (2) short-haul (Japan, Vietnam, Philippines, and central Asia)
were doing better.
CSA is optimistic that domestic can see a recovery in demand to more normalized levels
from 4Q. International growth expected to be still double-digit, but geopolitics could
impact some routes with US and Europe potentially weaker. (KL)
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01055 CHINA SOUTH AIR
Nominal 
2.690 +0.070 (+2.672%) Research Report
11/09/2019 13:52
{I-bank focus}BofAML cuts China Southern Airlines to HK$5.35
| Remark: | Real time quote last updated: 24/04/2024 17:55 |
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