China Eastern Airlines (600115) Third Quarterly Review: Q3 load factor and seat income both reduce oil prices and drive cost improvements

China Eastern Airlines (600115) Third Quarterly Review: Q3 load factor and seat income both reduce oil prices and drive cost improvements

Event: The company released the third quarter report of 2019: the company achieved operating income of 934 in the first three quarters.

One million yuan, an annual increase of 6.

3%; net profit attributable to mother 43.

67 ppm, a decrease of 2 per year.

7%; net profit deducted from non-mother 38.

9.3 billion, down 8 a year.

0%.

Q3 achieved operating income of 346.

1.6 billion, an annual increase of 3.

5%; net profit attributable to mother 24.

24 ppm, an increase of 9 per year.

8%; net profit deducted from non-mother 23.

31 ppm, an increase of 10 in ten years.

42%.

Q3 passenger load factor and seat income both fell, affected by the supply and demand pattern and high base.

The overall RPK / ASK growth rate of the company in Q3 2019 was +10.

1% / + 11.

8%, achieving a load factor of 82.

4% a year -1.

3 points.

In terms of air routes, the growth rate of domestic routes RPK / ASK was 11 respectively.

2% / 13.

5%, guest carbon dioxide 83.

6% a year -1.

7 points; RPK / ASK growth rate for international routes is 9 respectively.

5% / 9.

6%, the load factor 8 is 0.

6%, -0 per year.

1 point, the international line supply and demand pattern is better than domestic.

At the level of air tickets, 杭州夜网论坛 the company’s passenger kilometer income with fuel surcharge in the first half of the year was 0.

513 yuan, ten years -1.

35% (of which domestic / international income levels are -2.

4% / 0.

4%), we calculated that Q3 unit RPK operating income decreased by 6%, the company’s passenger load factor and fare decreased due to three main reasons: 1) pressure on business demand; 2) the first half of the faster capacity introduction;) The capacity scheduling was prudent in the same period last year, and achieved a higher load factor and freight base.

Oil prices fell by more than 10%, including cost control, and the company’s cost performance was excellent.

The ex-factory price of domestic jet fuel drops by 10 in 2019Q3.

9%, the average price of Brent crude is 62.

1 US dollar / barrel, substantially lower than 75 in the same period last year.At a price of $ 2 (previously -17%), at least, the company continued to lean management on various parts of the budget and routes. It is expected that the unit fuel consumption will remain lower, which will lead to a significant improvement in fuel costs. The operating cost of the company in Q3 only increased by 3.

4%.

The Q3 company’s selling / administrative expense ratios were 4 respectively.

3%, 2.

6%, -0 per year.

47 points / +0.

2 points, cost rate is well controlled.

Foreign exchange losses have been reduced, and the company has begun operations in Beijing and Shanghai in four markets. The competitive landscape is improving.

Q3 RMB depreciates against USD2.

88%, the company’s exchange gains and losses were -14.

7 trillion, compared with -16 in the same period last year.

700 million.

Calculate the company’s Q3 foreign exchange earnings total 48.

600 million a year + 1%.

In September, China Eastern Airlines and Juneyao Airlines successfully completed cross-shareholding strategic cooperation, and the competition pattern of Shanghai destinations will improve.

In addition, the company officially entered the Beijing Daxing Airport and Shanghai Pudong Airport S1 satellite hall operation. The original core Beijing-Shanghai route is still operated at the Capital Airport. The company opened a new hub in Beijing-Shanghai dual-city, two cities and four operations, the company ‘s routesThe pursuit of quality continues to lead.

Investment suggestion: Under the background of macroeconomic growth forecast, the performance of aviation demand has improved. Under the background of macroeconomic growth forecast, the performance of aviation demand has been transformed into a replacement, and the merger of Boeing 737MAX grounding time has brought improvements in industry supply and demand.The two hubs operate four markets in two cities. The main base area has a significant advantage and the market share of first-line routes is high. It is expected that EPS for 2019-2021 will be 0.

28 yuan, 0.

38 yuan, 0.

55 元,对应PE 为19x\14x\9x,维持“买入-A”评级。 Risk warning: Aviation demand is lower than expected, oil prices have increased sharply, and the real RMB has depreciated