China Eastern Airlines (600115) semi-annual report comment: high base causes decline in revenue quality

China Eastern Airlines (600115) semi-annual report comment: high base causes decline in revenue quality

China Eastern Airlines disclosed in its 2019 Interim Report that it achieved operating income of 587 in the first half of the year.

800 million, an increase of 8 per year.

0%, achieving net profit attributable to mother 19.

4.3 billion, down 14 previously.


The second quarter realized operating income of 287.

300 million, an annual increase of 3.

84%, net profit attributable to mother-0.

6.3 billion.

The high base in the second quarter led to a decline in the quality of earnings, and the revenue growth rate increased significantly in the first half of the year.

36%, RPK increased by 10.

61%, load factor 82.

66%, an increase of 0 every year.

19 points.

Due to the relatively sluggish macro economy in the second quarter, the pressure on public business demand and the high base of freight rates for the same period last year, the company’s unit income declined, and the unit RPK operating income was about 0.

53 yuan, a year of decline of about 5%, while the company’s ASK growth rate fell to 10 in the second quarter.

1%, down from 11 in the first quarter.

2% increase and load factor decreased by 0%.

43pct, lower than 0 before the first quarter.

The performance and performance of 89pct, the company’s disposal of Shanghai Airlines China Travel, the reorganization is no longer consolidated, comprehensive factors led to the company’s second-quarter revenue growth rate was only 3.

84%, and dragged down the growth rate throughout the first half.

The consolidation of leases caused cost shifts, but the overall level remained basically stable. The company’s jet fuel cost was 166 in the first half of the year.

2.5 billion, higher than the growth rate, which is basically close to the volume of capacity. In terms of non-oil costs, the company’s take-off and landing costs, the cost of food equipment supplies, and the growth rate of business volume are basically close to the growth rate of staff costs, flying maintenance costs.For 13

9%, slightly faster than business volume growth.

Due to the change of the rent standard, the company’s operating leased aircraft entered the table, the lease cost was almost zero, and the depreciation expense increased by 30.

3.6 billion to 97.

2.9 billion, an increase of 45 in ten years.

4%, but overall, the company’s cost level has remained basically stable.

The level of sales and management expenses was slightly optimized, and the financial costs significantly increased the company’s sales expense ratio in the first half of the year due to regulatory adjustments5.

06%, a decline of 0 per year.

2pc, management (including R & D) expense ratio 2.

74%, a slight increase of 0 a year.

At 08pct, as 天津夜网 operating leases entered the table, the company’s lease rate increased significantly, and interest expenses increased by 5.

5.4 billion, at the same time due to exchange losses in the first half of the year1.

9.6 billion, driving the financial expense ratio to 4.

73%, a slight increase of 0 a year.

17pct, the deduction rate of financial expenses 4.

40%, a year to raise 0.
84 points.
Supplementary income was basically stable, and investment income slightly increased the company’s other income in the first half of the year29.

7.6 billion, an increase of 1 every year.

6.1 billion yuan, basically stable, and investment income reached 2 due to the disposal of Shanghai Airlines China Travel and other reasons.

6.2 billion, an increase of 1 every year.

72 billion.

Gains and losses from changes in fair value were 南宁桑拿 18 million yuan, a decrease of over 2%.

2.5 billion, mainly due to the high base caused by the increase in foreign exchange forward contract revenue last year.

On the whole, the company’s profit from foreign exchange deductions was maximized in the first half of the year29.

1 billion, down 14 previously.

5%, the performance was basically in line with expectations.

Investment suggestion With the commissioning of Daxing Airport in the future, the company’s strategic goals are clear. The Beijing and Shanghai hubs form the route network layout of “Double Dragons Going to the Sea”, and the core gold trunk Beijing-Shanghai line has been working hard to maintain stable and profitable quality at the old capital airport.The aviation cross-shareholding coordinated operation further optimizes the Shanghai market competition pattern and has broad development space.

Taking into account the significant depreciation of the exchange rate in the previous report, we have started at 88.

300 million, 105.

0 billion, 134.

100 million cut the profit forecast for 2019-2021 by 50.

1%, 25.

1%, 32.

6% to 43.

4 billion, 78.

6 billion, 90.

400 million, for the time being do not consider the issuance of A shares additional shares have not yet landed, taking into account the three major aviation history PE estimates that the center is about 15 times, since 9.

15 yuan lowered the target price of 13.

9% to 7.

88 yuan, corresponding to an estimated 15X of 2020 EPS.

Risk warning: macroeconomic fluctuations, soaring oil prices, depreciation of exchange rates, security accidents