China Eastern Airlines (600115): International performance is eye-catching
Event: The company released its 2018 annual report: realized revenue of US $ 114.9 billion, approximately + 13%, and net profit attributable to the mother 27.
1 ppm, ten years -57.
4%, net of non-attributed net profit of 19.
300 million, previously -57%; 18Q4 revenue of +11 per year.
7%, deducting non-attributed net profit can be recovered 2.3 billion (17Q4 changed to 11.
6 ‰), the expansion of Q4 dragged down performance.
International flight fare levels have rebounded significantly.
2018 company overall / domestic / international RPK + 10% / 10.
2% / 9.
6%, overall / domestic / international ASK + 8.
3% / 9.
2% / 6.
9%, achieving a load factor of 82.
29%, ten years +1.
23 points (domestic / international +0.
99 points), of which 18Q4 overall RPK / ASK + 10% / 11 respectively.
8%, load factor rating 0.
6 points, 18 reached the company’s oil-bearing passenger kilometers income level of 0.
538 yuan, +4 for the whole year.
1% (excluding oil +3.
5%), where domestic / international income levels are +4 respectively.
1% / 4.
3% (without oil +2.
8% / 4.
7%), international ticket prices have risen significantly.
We estimate that the company’s 18H1 / Q3 / Q4 fares are +3.
4% / + 5.
6% / + 3%, the narrowing of the fare growth rate in the 18Q4 quarter was mainly due to faster capacity growth (Q3 / Q4 ASK were +4 respectively.
7% / 8.
At the end of 18, the company’s fleet size was 692, and 67 were introduced, 14 were withdrawn, and a net increase of 53. The company expects a net increase of 59, 51, 8 aircraft in 19-21.
The cost of jet fuel has increased rapidly, and the cost of non-jet fuel per unit of ASK has fallen2.
In 18 years, the company’s fuel cost was 337 trillion, + 34% per year. At the same time, the average domestic fuel oil purchase price was + 27% per year. We estimated that the company’s fuel consumption would increase by +5.
3%, which is lower than the growth rate of capacity delivery, and the fuel consumption per unit of ASK decreased by 2.
8%, driving unit ASK fuel cost + 24%, the increase is lower than the increase in oil prices.
The company’s headquarters unit ASK non-oil cost half a year -2.6% (18H2 continues the H1 non-oil cost improvement trend), the company’s cost ratio of replacing financial expenses is 8.
5% per year -0.
5 points, the overall cost of the company is well controlled.
Imply that the exchange rate of non-profit expansion will increase by 11% for the whole year.
Due to the 18-year depreciation of RMB against USD and USD5.
4%, resulting in exchange losses of 21 for the company.
900 million US dollars (17 billion yuan exchange rate brought about 南宁桑拿 by the exchange rate of 2 billion US dollars, if the yuan against the US dollar 1% change, corresponding to the corresponding impact on net profit1.
7.8 billion US dollars, 19 years after the implementation of the new lease budget is expected to increase exchange sensitivity), the company’s current interest rate of USD resistance of 28.5 billion yuan, accounting for 21.
5% (previously downgraded by 6.
7 points), the company’s financial costs increase 46.
500 million, canceled exchange rate increased by 4.
US $ 600 million (mainly due to the increase in the average expenditure balance during the reporting period). Excluding the impact of foreign exchange and non-profit and loss, the company’s 18-year total profit reached approximately US $ 5.3 billion, an increase of + 11%.
The company’s asset disposal income in 2018 was 4.
US $ 9.6 billion. The previous actual increase was mainly due to the company’s relocation to a new office address and disposal of land from the original office address to generate revenue.
Investment suggestion: Against the background of the macroeconomic growth prospects, the performance of aviation demand has improved, the surrounding oil and exchange rates are relatively stable, and aviation ‘s 19-year performance improvement has improved certainty. We are optimistic about the performance of aviation in the peak season, and the company has a significant position in the main base region.The market share of first-line air routes is high, and EPS is expected to be 0 in 2019-2021.
56 yuan, 0.
69 yuan, 0.
87 元，对应PE为13x\10x\8x，维持“买入-A”评级。 Risk warning: Aviation demand is lower than expected, oil prices have increased sharply, and the real RMB has depreciated