Cathay Pacific Well-Positioned To Capture Long-Awaited Demand Recovery; Maintain FVE at HKD 7

Following its investor day, we keep our long-term view for Cathay Pacific’s recovery unchanged. The company is sitting on the strongest liquidity position since the coronavirus pandemic, and our expectation for a pickup in second-half passenger traffic will mark the beginning of a long-awaited recovery for Hong Kong’s flagship carrier. However, we have increased our 2021 loss estimates following adjustments to a slower-than-expected recovery in first-half 2021. Our profit forecast assumes a rebound to profit in 2022. Our fair value estimate remains HKD 7 per share. We think the shares are fairly valued.