中国航空业深度研究英文(pdf 21页)

Upgrading the airlines on the Olympics – On our forecast of 18% air passengergrowth and a historically high 74.8% passenger load factor for 2008, we thinkthe Olympics theme will drive Chinese airline stocks. We rollover our estimatesto end-2008 and raise our targets for Air China, CSA and CEA by 48%, 36% and30% to HK$8.00, HK$5.50, HK$3.35, respectively. Air China remains our toppick as the key beneficiary of the 2008 Beijing Olympics.
 Air China is our top pick of the Chinese airlines – As the sole designatedChinese airline for the Beijing Olympics and with 45% market share in Beijing,Air China should benefit most from the Olympics on expanding margins andgreater global brand recognition. We estimate its 2008 EPS to reach RMB0.56.
 Scenario analysis supports our bullish view – If Singapore fuel averages US$70and US$65 in 2007 and 2008, respectively, and the renminbi appreciates 6%p.a., we think the Big Three could see 60% upside. Even under a moreconservative scenario (fuel $75/$70, renminbi appreciates 3.5% p.a.), we thinkAir China could still offer 20% upside.
 Positive catalysts – A favorable industry earnings outlook and the possibility ofsupportive government policies would support airline valuations (see our 3January 2007 note https://www.citigroupgeo.com/pdf/SAP01615.pdf), in our view.
 Key risks – 1) Volatile fuel prices; and 2) possibly high acquisition premium forCEA if SIA walks away. We view a cut in fuel surcharges in line with fuel pricesas neutral.
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