Morgan Stanley has issued a research report upgrading the ratings of CHINA SOUTH AIR (01055.HK) -0.050 (-1.429%) Short selling $7.96M; Ratio 21.473% , CHINA EAST AIR (00670.HK) -0.030 (-1.190%) Short selling $2.81M; Ratio 14.340% , and AIR CHINA (00753.HK) -0.040 (-0.837%) Short selling $5.15M; Ratio 8.980% to Overweight, with target prices raised by 103.4%/ 142.4%/ 96.6% to $5.9/ $3.49/ $7.61.The broker pointed out that China's aviation industry is entering a multi-year earnings upcycle. The broker considered it the first industry to shun China's deflation, with earnings expected to reach 2-4 times its 2026 forecast over the next 3-5 years.Related NewsAIR CHINA Narrows Full-Yr Loss to RMB233MThe broker also lifted its 2024-26 EPS forecasts for the three major Chinese airlines. It increased CHINA SOUTH AIR's EPS forecasts for the period by 49.6%/ 78.3%/ 60.2% to RMB0.01/ RMB0.32/ RMB0.57; CHINA EAST AIR's by 3%/ 200.5%/ 73.7% to an LPS of RMB0.15/ EPS of RMB0.17/ EPS of RMB0.37; and AIR CHINA's by 14.3%/ 56.5%/ 52.2% to a an LPS of RMB0.03/ EPS of RMB0.28/ EPS of RMB0.65.In addition, the broker kept an Equalweight rating on CATHAY PAC AIR (00293.HK) -0.460 (-4.694%) Short selling $15.93M; Ratio 22.437% and downgraded TRAVELSKY TECH (00696.HK) -0.160 (-1.384%) Short selling $3.15M; Ratio 5.081% to Underweight.(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-04-02 16:25.)