Morgan Stanley has issued a research report stating that it believes AIR CHINA's (00753) share price has a 70% to 80% probability of rising over the next 60 days. The bank set a target price of HK$8.11 for the stock with an "Overweight" rating.

Morgan Stanley noted that while AIR CHINA's Q3 earnings were weaker than expected and its parent company proposed a capital injection—leading to a decline in the stock price—the bank does not view these factors as altering its constructive outlook on the upward cycle of mainland airlines.

The report maintains that if business travel demand gradually improves, higher asset utilization among mainland airlines will support their pricing power. As a result, Morgan Stanley believes the current share price adjustment of AIR CHINA presents an attractive buying opportunity for the market.