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China Southern Airlines Co Ltd Class H 01055

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Stock XHKG Rating as of
HKD 3.12 +0.06 (1.96%)
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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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01055 is trading at a 379% premium.
Price
HKD 3.06
Fair Value
HKD 2.20
Uncertainty
High
1-Star Price
HKD 3.34
5-Star Price
HKD 1.65
Economic Moat
Wlt
Capital Allocation
Xnhzqbjx

Bulls Say, Bears Say

Bulls

China Southern will see a strong earnings rebound as China ends its zero-COVID-19 policy.

Bears

Yuan depreciation damps China Southern's earnings.

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News

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Trading Information

Previous Close Price
HKD 3.06
Day Range
HKD 2.99–3.12
52-Week Range
HKD 2.54–5.10
Bid/Ask
HKD 3.11 / HKD 3.12
Market Cap
HKD 56.54 Bil
Volume/Avg
13.5 Mil / 14.2 Mil

Key Statistics

Price/Earnings (Normalized)
—
Price/Sales
0.31
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
—

Company Profile

China Southern Airlines is based in Guangzhou and is one of the three largest state-owned airlines in China. The group operated a fleet of 894 aircraft as of 2022 and carried more than 150 million passengers in prepandemic 2019, ranking first in Asia. It runs a spoke-and-hub model under which it gathers and distributes passengers from air hubs like Guangzhou and Beijing. The group's route network extends to over 243 destinations and 44 countries and regions.
Sector
Industrials
Industry
Airlines
Stock Style Box
Large Core
Total Number of Employees
99,468
Website
https://www.csair.com

Competitors

Valuation

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Metric
01055
00293
C6L
Price/Earnings (Normalized)
 —8.9812.85
Price/Book Value
 1.370.951.30
Price/Sales
 0.310.691.09
Price/Cash Flow
 1.273.393.89
Price/Earnings
01055
00293
C6L

Financial Strength

Metric
01055
00293
C6L
Quick Ratio
 0.150.47—
Current Ratio
 0.220.50—
Interest Coverage
 1.403.607.61
Quick Ratio
01055
00293
C6L

Profitability

Metric
01055
00293
C6L
Return on Assets (Normalized)
 −0.14%3.95%5.71%
Return on Equity (Normalized)
 −1.10%12.62%20.30%
Return on Invested Capital (Normalized)
 0.40%7.54%7.27%
Return on Assets
01055
00293
C6L
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