Morgan Stanley has issued a research report upgrading the ratings of CHINA SOUTH AIR (01055.HK) -0.040 (-1.143%) Short selling $10.18M; Ratio 18.810% , CHINA EAST AIR (00670.HK) 0.000 (0.000%) Short selling $2.23M; Ratio 15.203% , and AIR CHINA (00753.HK) -0.010 (-0.209%) Short selling $6.21M; Ratio 14.080% 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 NewsHSBC Research: Challenge Sustained for CN Big 3 Airlines; Ratings UnderweightThe 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) -0.440 (-4.490%) Short selling $153.47M; Ratio 51.693% and downgraded TRAVELSKY TECH (00696.HK) -0.120 (-1.038%) Short selling $4.61M; Ratio 7.618% to Underweight.(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-04-03 16:25.)