Skies Not Clear for China Aviation Sector Just Yet -- Market Talk

Dow Jones

Apr 26, 2023

0733 GMT - Chinese airlines got a lift from the scrapping of strict Covid travel curbs, but the reopening rally looks to be near its end, putting focus on the sector's legacy baggage, UOB Kay Hian's Roy Chen says in a note. UOB has an upbeat profit view for 2023, but thinks the Big Three--Air China, China Eastern and China Southern--may not be able to repair their balance sheets fast enough. As pandemic losses eclipsed the preceding 10 years' profits by 30%, the equity fundraising carriers did to stay afloat is set to dilute future EPS, meaning earnings will need to "expand commensurately" to justify pre-Covid valuations, he says. Leverage is very high with little hope for dividends and more scope for equity fundraising ahead, he adds. UOB reinitiates sector coverage at underweight. (fabiana.negrinochoa@wsj.com)

(END) Dow Jones Newswires

April 26, 2023 03:33 ET (07:33 GMT)

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UOB has an upbeat profit view for 2023, but thinks the Big Three--Air China, China Eastern and China Southern--may not be able to repair their balance sheets fast enough. As pandemic losses eclipsed the preceding 10 years' profits by 30%, the equity fundraising carriers did to stay afloat is set to dilute future EPS, meaning earnings will need to \"expand commensurately\" to justify pre-Covid valuations, he says. Leverage is very high with little hope for dividends and more scope for equity fundraising ahead, he adds. UOB reinitiates sector coverage at underweight. (fabiana.negrinochoa@wsj.com) \n</p>\n<pre>\n \n</pre>\n<p>\n  (END) Dow Jones Newswires\n</p>\n<p>\n  April 26, 2023 03:33 ET (07:33 GMT)\n</p>\n<p>\n  Copyright (c) 2023 Dow Jones &amp; Company, Inc.\n</p>\n</font>","source":null,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Skies Not Clear for China Aviation Sector Just Yet -- Market Talk</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSkies Not Clear for China Aviation Sector Just Yet -- Market Talk\n</h2>\n\n<h4 class=\"meta\">\n\n\n<div class=\"head\" \">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Dow Jones </p>\n<p class=\"h-time\">2023-04-26 15:33</p>\n</div>\n\n</div>\n\n\n</h4>\n\n</header>\n<article>\n<font class=\"NormalMinus1\" face=\"Arial\">\n<p>\n     0733 GMT - Chinese airlines got a lift from the scrapping of strict Covid travel curbs, but the reopening rally looks to be near its end, putting focus on the sector's legacy baggage, UOB Kay Hian's Roy Chen says in a note. UOB has an upbeat profit view for 2023, but thinks the Big Three--Air China, China Eastern and China Southern--may not be able to repair their balance sheets fast enough. As pandemic losses eclipsed the preceding 10 years' profits by 30%, the equity fundraising carriers did to stay afloat is set to dilute future EPS, meaning earnings will need to \"expand commensurately\" to justify pre-Covid valuations, he says. Leverage is very high with little hope for dividends and more scope for equity fundraising ahead, he adds. UOB reinitiates sector coverage at underweight. (fabiana.negrinochoa@wsj.com) \n</p>\n<pre>\n \n</pre>\n<p>\n  (END) Dow Jones Newswires\n</p>\n<p>\n  April 26, 2023 03:33 ET (07:33 GMT)\n</p>\n<p>\n  Copyright (c) 2023 Dow Jones &amp; Company, Inc.\n</p>\n</font>\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"601111","symbol_name":"中国国航","start_time":0,"source_url":"https://dowjonesnews.com/newdjn/logon.aspx?AL=N","article_id":"2330563553","we_media_id":"106","thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2330563553","pubTimestamp":1682494380,"columns":[],"sourceInfo":null,"weMediaInfo":{"media_name":"Dow Jones","introduction":"Dow Jones publishes the world’s most trusted business news and financial information in a variety of media.","home_visible":0,"id":"106","head_image":"https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99"},"summary":"0733 GMT - Chinese airlines got a lift from the scrapping of strict Covid travel curbs, but the reop","collect":0,"end_time":0,"defaultTopTitle":"","property":[],"viewcount":null,"language":"en","relate_stocks":{"600029":"南方航空","600115":"中国东航","601111":"中国国航","BK0164":"国企混改","BK4124":"机动车零配件与设备","BK0196":"行业龙头","BK1561":"航空股","BK1514":"人民币升值概念","BK0053":"迪士尼","BK0010":"央企","BK0020":"浦东新区","BK1123":"航空公司","BK0012":"证金概念","00670":"中国东方航空股份","BK1505":"一带一路","K3TD.SI":"CHINA SOUTHERN AIR ADR 10","BK0006":"大央企重组","00753":"中国国航","BK0183":"MSCI概念","BK0188":"融资融券","BK4008":"航空公司","AIRYY":"Air China, Ltd.","BK0187":"一线龙头","K3CD.SI":"CHINA EASTERN AIR ADR 10","BK0028":"国家队","01055":"中国南方航空股份","BK0280":"航空运输","BK0000":"一带一路","CAAS":"中汽系统"},"translate_title":"中国航空业的前景尚不明朗——市场对话","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"600029":0.9,"600115":0.9,"601111":0.9,"00670":0.9,"00753":0.9,"01055":0.9,"AIRYY":0.9,"CAAS":1,"JE":1,"K3CD.SI":0.9,"K3TD.SI":0.9},"content_text":"0733 GMT - Chinese airlines got a lift from the scrapping of strict Covid travel curbs, but the reopening rally looks to be near its end, putting focus on the sector's legacy baggage, UOB Kay Hian's Roy Chen says in a note. UOB has an upbeat profit view for 2023, but thinks the Big Three--Air China, China Eastern and China Southern--may not be able to repair their balance sheets fast enough. As pandemic losses eclipsed the preceding 10 years' profits by 30%, the equity fundraising carriers did to stay afloat is set to dilute future EPS, meaning earnings will need to \"expand commensurately\" to justify pre-Covid valuations, he says. Leverage is very high with little hope for dividends and more scope for equity fundraising ahead, he adds. UOB reinitiates sector coverage at underweight. (fabiana.negrinochoa@wsj.com) \n\n\n \n\n\n  (END) Dow Jones Newswires\n\n\n  April 26, 2023 03:33 ET (07:33 GMT)\n\n\n  Copyright (c) 2023 Dow Jones & Company, Inc.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":true,"code":"91000000","status":"200"}}}