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<Research>Jefferies Lowers CATHAY PAC AIR (00293.HK) TP to $9.8, Reflecting Higher Staff Costs
Recommend 7 Positive 12 Negative 6 |
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CATHAY PAC AIR (00293.HK) management reiterated at a recent meeting that the company is operating in line with its earlier comments on its full-year results for FY23, Jefferies quoted in a research note. Jefferies commented that CATHAY's passenger yield performance was in line with company management's forecasts during the FY23 results announcement and the broker's earlier forecasts, with passenger yields on some routes falling by 10% YoY. As for passenger capacity, it has returned to 80% of its pre-pandemic capacity and remains on track to meet its target of returning to 100% by 1Q25. CATHAY management noted that the strong performance of advance bookings this summer benefited from pent-up passenger demand and strong demand for business travel. However, Jefferies believed that the airline's future strategy of planning to increase the number of transit passengers may have a negative impact on its passenger yield. Jefferies expected CATHAY's operating profit to have peaked this financial year (FY24), although its earnings performance will benefit from a recovery in Air China's earnings. Reflecting these factors and rising staff costs, the broker lowered its target price for CATHAY from $10.5 to $9.8 and maintained its Buy rating. AAStocks Financial News |
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