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Air China Ltd Class H 00753

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Stock XHKG Rating as of
HKD 4.04 −0.01 (0.25%)
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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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00753 is trading at a 769% premium.
Price
HKD 4.05
Fair Value
HKD 4.40
Uncertainty
High
1-Star Price
HKD 4.76
5-Star Price
HKD 7.35
Economic Moat
Tbt
Capital Allocation
Czxdwmjr

Bulls Say, Bears Say

Bulls

Air China will see the largest earnings upside among the three airlines as China ends its zero-COVID-19 policy.

Bears

Chinese yuan depreciation damps Air China's earnings.

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News

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Trading Information

Previous Close Price
HKD 4.05
Day Range
HKD 4.00–4.12
52-Week Range
HKD 3.56–6.73
Bid/Ask
HKD 4.03 / HKD 4.04
Market Cap
HKD 67.04 Bil
Volume/Avg
22.7 Mil / 18.0 Mil

Key Statistics

Price/Earnings (Normalized)
—
Price/Sales
0.37
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
—

Company Profile

Air China is based in Beijing. It is one of the largest state-owned airlines and the flag carrier in China. The group operated a fleet of 762 aircraft as of 2022 and carried more than 115 million passengers in prepandemic 2019. It runs a spoke-and-hub model under which it gathers and distributes passengers from air hubs such as Beijing, Chengdu, and Shanghai. The group’s route network extends to over 187 destinations and 43 countries and regions.
Sector
Industrials
Industry
Airlines
Stock Style Box
Large Growth
Total Number of Employees
102,874
Website
http://www.airchina.com.cn

Competitors

Valuation

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Metric
00753
C6L
00293
Price/Earnings (Normalized)
 —12.878.94
Price/Book Value
 1.641.370.95
Price/Sales
 0.371.570.69
Price/Cash Flow
 1.546.343.38
Price/Earnings
00753
C6L
00293

Financial Strength

Metric
00753
C6L
00293
Quick Ratio
 0.221.070.47
Current Ratio
 0.291.230.50
Interest Coverage
 0.677.093.60
Quick Ratio
00753
C6L
00293

Profitability

Metric
00753
C6L
00293
Return on Assets (Normalized)
 −0.55%5.83%3.95%
Return on Equity (Normalized)
 −5.09%17.73%12.62%
Return on Invested Capital (Normalized)
 1.69%12.55%7.54%
Return on Assets
00753
C6L
00293
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