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China Southern Airlines Co Ltd Class A 600029

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Stock XSHG Rating as of
CNY 5.72 +0.07 (1.24%)
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As of Delayed Price Closed
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Company Report

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Chinese Airlines’ 2023 Losses Reflected and Well Expected, We Look Ahead to a 2024 Turnaround

Cheng Wang

The big three Chinese airlines we cover, Air China, China Southern Airlines, and China Eastern Airlines, remained lossmaking in 2023. The announced net losses are all within the ranges of their preliminary guidance and hence are well expected. As international passenger traffic continues to recover, we project all three airlines to turn around in 2024 with CNY 4.9 billion net income for Air China, CNY 6.1 billion for China Southern, and CNY 1.0 billion for China Eastern. We keep our fair value estimates at HKD 6.40 (CNY 5.90) for Air China, HKD 4.70 (CNY 4.30) for China Southern, and HKD 2.58 (CNY 2.36) for China Eastern. Air China is our preferred pick among the three as we think it should benefit more from the rebound in business travel due to larger exposure to the premium market.

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Price vs Fair Value

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600029 is trading at a 29% premium.
Price
CNY 5.54
Fair Value
CNY 5.50
Uncertainty
High
1-Star Price
CNY 3.76
5-Star Price
CNY 1.46
Economic Moat
Ydrf
Capital Allocation
Nvgpqyvl

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
CNY 5.65
Day Range
CNY 5.62–5.73
52-Week Range
CNY 5.32–7.76
Bid/Ask
CNY 5.72 / CNY 5.73
Market Cap
CNY 103.65 Bil
Volume/Avg
48.8 Mil / 43.1 Mil

Key Statistics

Price/Earnings (Normalized)
—
Price/Sales
0.65
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 Value
Total Number of Employees
99,468
Website
https://www.csair.com

Competitors

Valuation

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Metric
600029
00293
C6L
Price/Earnings (Normalized)
 —8.4312.36
Price/Book Value
 2.820.891.25
Price/Sales
 0.650.651.05
Price/Cash Flow
 3.053.193.74
Price/Earnings
600029
00293
C6L

Financial Strength

Metric
600029
00293
C6L
Quick Ratio
 0.140.47—
Current Ratio
 0.210.50—
Interest Coverage
 0.663.607.61
Quick Ratio
600029
00293
C6L

Profitability

Metric
600029
00293
C6L
Return on Assets (Normalized)
 −1.31%3.95%5.71%
Return on Equity (Normalized)
 −10.20%12.62%20.30%
Return on Invested Capital (Normalized)
 0.06%7.54%7.27%
Return on Assets
600029
00293
C6L
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