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China Eastern Airlines Corp Ltd Class H 00670

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Stock XHKG Rating as of
HKD 2.20 +0.06 (2.80%)
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As of Delayed Price Closed
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Company Report

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Chinese Airlines Earnings: High Jet Fuel Prices and Excess Seat Capacity Weigh on Bottom Line

Cheng Wang

The big three Chinese airlines we cover, Air China, China Southern Airlines, and China Eastern Airlines, either made losses or merely broke even in the first quarter. However, passenger traffic numbers have exceeded prepandemic levels. We attribute the results primarily to higher jet fuel prices, which, on average, were 39% higher than that in the first quarter of 2019. In addition, we believe overcapacity in the domestic market constrained the airlines' ability to transfer the increased jet fuel costs to passengers.

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Price vs Fair Value

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00670 is trading at a 426% premium.
Price
HKD 2.20
Fair Value
HKD 8.81
Uncertainty
High
1-Star Price
HKD 4.00
5-Star Price
HKD 7.22
Economic Moat
Mxf
Capital Allocation
Nyzlgjqs

Bulls Say, Bears Say

Bulls

China Eastern should see a strong earnings rebound as air travel recovers.

Bears

Chinese Yuan depreciation will weigh on China Eastern's earnings.

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News

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Trading Information

Previous Close Price
HKD 2.14
Day Range
HKD 2.14–2.20
52-Week Range
HKD 1.82–3.05
Bid/Ask
HKD 2.15 / HKD 2.20
Market Cap
HKD 49.04 Bil
Volume/Avg
6.6 Mil / 5.6 Mil

Key Statistics

Price/Earnings (Normalized)
—
Price/Sales
0.34
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
—

Company Profile

China Eastern Airlines is based in Shanghai and is one of the three largest state-owned airlines in China. The group operated a fleet of 778 aircraft as of 2022 and carried more than 130 million passengers in prepandemic 2019. It runs a hub-and-spoke model under which it gathers and distributes passengers from air hubs like Shanghai, Beijing, Xi'an, and Kunming. The group’s route network extends to over 220 destinations and 40 countries and regions.
Sector
Industrials
Industry
Airlines
Stock Style Box
Large Growth
Total Number of Employees
81,781
Website
https://www.ceair.com

Competitors

Valuation

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Metric
00670
C6L
00293
Price/Earnings (Normalized)
 —11.328.55
Price/Book Value
 1.101.360.91
Price/Sales
 0.341.560.66
Price/Cash Flow
 1.716.283.23
Price/Earnings
00670
C6L
00293

Financial Strength

Metric
00670
C6L
00293
Quick Ratio
 0.111.070.47
Current Ratio
 0.191.230.50
Interest Coverage
 −11.317.093.60
Quick Ratio
00670
C6L
00293

Profitability

Metric
00670
C6L
00293
Return on Assets (Normalized)
 −1.95%5.83%3.95%
Return on Equity (Normalized)
 −20.51%17.73%12.62%
Return on Invested Capital (Normalized)
 −2.59%12.55%7.54%
Return on Assets
00670
C6L
00293
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