Air China (601111): It is difficult to cover up the operation of oil remittances
Key points of the report Description Air China disclosed its 2018 financial report: In 2018, the company’s operating income increased for ten years.
7% to 1367.
700 million, the attributable net profit increases by 1 every year.
3% to 73.
4 trillion, corresponding to EPS.
53 yuan, deducting non-attributable net profit decreased by 8.
4% to 66.
2 ppm; of which, operating income for the fourth quarter was 338.
At 900 million US dollars, the attributable net profit was previously substantially reduced to 4.
0 million yuan to achieve deduction of non-attributable net profit of 0.
900 million; a cash dividend of 1 per 10 shares is proposed.
0 yuan (including tax).
Incident Comment Oil price exchange rate dragged down performance and operating capacity continued to improve.
In 2018, the company’s jet fuel cost increased by 35 in advance.
5%, but by improving operating efficiency and controlling cost pressures, the unit non-oil cost has been reduced.
4%, the company’s operating costs increased by 14 in ten years.
At the same time, the dollar exchange rate against the renminbi has increased by 5.
0%, the company incurred exchange loss losses of 23.
800 million, a year-on-year decrease of 53.
Earnings of ￡ 100 million have also dragged down long-term results.
However, benefiting from the impact of fare reform and fuel surcharge collection, the unit budget was extended and increased2.
8%, driving the improvement of profitability, the company’s integration realized the deduction of foreign exchange profits by 123.
30,000 yuan, an increase of about 44 in ten years.
4%, operating capacity showed an improvement trend.
Non-recurring earnings drive up performance.
In the context of the double kill of oil and gas, the company’s consolidated net profit increased by 1.
3%, in addition to the improvement of the main business operating conditions, investment income and non-recurring items and other contributions to increase profits: 1) Cathay Pacific turned losses into profit in 2018, contributing investment income2.
0 ppm; 2) Q4 recognizes the gains from the sale of Air China Cargo’s equity, and the gradual disposal of long-term equity gain is 5.
7 trillion; 3) The company actively develops surrounding routes and obtains route supplements26.
60,000 yuan, a sharp increase of 27.
6%; 4) The company’s fund receivable minus the value is ready to be switched back, contributing 3.
Q4 pressure on high oil prices still exists, and ticket upgrades improve revenue.
In the fourth quarter of 2018, domestic jet fuel prices increased by 34 quarterly.
At 7%, the pressure of high oil prices still exists. The company’s efficiency and cost control continue to increase, and the unit non-oil cost exceeds the downward trend by about 3%.
In the meantime, the income side 成都桑拿网 benefited from: 1) a low base for fares in 2017Q4; 2) a fuel surcharge levied at high oil prices; 3) the improvement of the level of international air tickets, which is estimated to increase the overall passenger mileage of Q4 by about 7.
9%, driving Q4 profitability to improve.
Investment suggestion: Allocate flexible varieties to accelerate profit improvement.
1) Considering the trends of supply and demand, oil prices and exchange rates, it is expected that the probability deviation of the company’s performance in 19 years will improve, and accelerated growth is expected to begin in the second quarter; 2) The company’s core routes are rich, passenger sensitivity is low, and the impact of grounding events has improved supply and demandThe price increase may be the highest, and the EPS is expected to be 0 in 2019-2021.
04 and 1.
24 yuan, corresponding PE is 12, 10, 8 times, maintaining the “buy” level.
Risk Warning: 1.
The growth trend of aviation demand; the extent of the increase in oil prices; the risk of RMB exchange rate; aviation safety accidents.