Global Mobility/Transport, Equity Long-Short

Mohshin Aziz

Thematic (Sector/Industry)

<ul>
<li>China is expanding its list of countries allowed to enter visa-free. A good gesture to make China more friendly to foreigners and one step closer to global best practices </li>
<li>Chinese major airlines and airports can become more desirable global aviation hubs, assuming they play their cards right </li>
<li>Doubt much can change in a year, but the seeds are sown for stiffer competition for airlines with a hub-and-spoke strategy in North Asia</li>
</ul>


China is expanding its list of countries allowed to enter visa-free. A good gesture to make China more friendly to foreigners and one step closer to global best practices 
Chinese major airlines and airports can become more desirable global aviation hubs, assuming they play their cards right 
Doubt much can change in a year, but the seeds are sown for stiffer competition for airlines with a hub-and-spoke strategy in North Asia


China to Provide Visa-Free for Six Countries - Why and The (Possible) Impact

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener"></a>With P/B back to the 5-year average of 1.9x but ROE surpassing the last five years, <a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener">Air China Ltd (753 HK)</a> is our High Conviction pick for 2024.</li>
<li>Lower US interest rates next year will reduce interest expenses as 18.7% of debt is USD-denominated. Potential Rmb appreciation vs. USD may bring significant exchange gain too.</li>
<li>Supportive government policies will further drive domestic traffic. For international traffic, more capacity resumption will power recovery. <a href="https://www.smartkarma.com/entities/cathay-pacific-airways-ltd" target="_blank" data-smartkarma-citation="entities:243:1" rel="noopener">Cathay Pacific Airways (293 HK)</a> is another profit accelerator.</li>
</ul>



With P/B back to the 5-year average of 1.9x but ROE surpassing the last five years, Air China Ltd (753 HK) is our High Conviction pick for 2024.
Lower US interest rates next year will reduce interest expenses as 18.7% of debt is USD-denominated. Potential Rmb appreciation vs. USD may bring significant exchange gain too.
Supportive government policies will further drive domestic traffic. For international traffic, more capacity resumption will power recovery. Cathay Pacific Airways (293 HK) is another profit accelerator.


2024 High Conviction: Air China (753 HK) - What Comes Down Must Go Up

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

<ul>
<li>Trip.com reported strong Q3 earnings, reflecting 2023's ongoing tourism revival</li>
<li>Net Income beat expectations, and company made progress on expense control</li>
<li>But we don't see "game-changing" numbers in Trip.com's latest earnings release</li>
</ul>


Trip.com reported strong Q3 earnings, reflecting 2023's ongoing tourism revival
Net Income beat expectations, and company made progress on expense control
But we don't see "game-changing" numbers in Trip.com's latest earnings release


Trip.com Q3 Quick Take: Net Inc > Consensus | Progress on Expenses | But Not a Game-Changer

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>Probe / Caixin Explains: EU probe into Chinese EV-makers’ alleged state support</li><li>China-Australia /: China, Australia agree to boost engagement in trade, energy</li><li>Property /: China should avoid a real estate ‘hard landing,’ former Chongqing mayor says</li></ul>

Probe / Caixin Explains: EU probe into Chinese EV-makers’ alleged state supportChina-Australia /: China, Australia agree to boost engagement in trade, energyProperty /: China should avoid a real estate ‘hard landing,’ former Chongqing mayor says

CX Daily: EU Probe Into Chinese EV-Makers’ Alleged State Support 

<ul><li>The number of weekly flights between China and the U.S. will increase again next month, sparking hopes that more supply will put downward pressure on sky-high ticket prices.</li><li>But industry insiders warned that the cost of a ticket won’t drop significantly anytime soon, as low travel demand means American airlines are taking a “cautious” approach to resuming operations.</li><li>From Nov. 9, Chinese carriers will be able to operate 35 weekly round-trips to the U.S., according to a U.S. Department of Transportation order issued Friday. </li></ul>

The number of weekly flights between China and the U.S. will increase again next month, sparking hopes that more supply will put downward pressure on sky-high ticket prices.But industry insiders warned that the cost of a ticket won’t drop significantly anytime soon, as low travel demand means American airlines are taking a “cautious” approach to resuming operations.From Nov. 9, Chinese carriers will be able to operate 35 weekly round-trips to the U.S., according to a U.S. Department of Transportation order issued Friday. 

More China-U.S. Flights Unlikely to Bring Down High Ticket Prices 

China

Air China Limited provides passenger, cargo, and airline-related services in China.  The Company is primarily based in Beijing and a major hub for domestic and international air transportation.  Air China's airline-related services include aircraft maintenance, repair, overhaul service, ground services, and in-flight catering services.

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Air China Ltd (H) (753 HK)

China to Provide Visa-Free for Six Countries - Why and The (Possible) Impact

China is opening visa-free entry for more countries, aiming to improve its global image and become a preferred aviation hub in North Asia. Could...

Mohshin Aziz

2024 High Conviction: Air China (753 HK) - What Comes Down Must Go Up

Air China will have a solid ROE recovery and an inexpensive P/B in 2024. It will benefit from lower US rate and Rmb appreciation. Meanwhile,...

Osbert Tang, CFA

Trip.com Q3 Quick Take: Net Inc > Consensus | Progress on Expenses | But Not a Game-Changer

Trip.com reported Q323 results that featured strong top-line growth, sharp Y/Y improvement in margins, and progress on cost control. But its Q323...

Tracking Traffic

CX Daily: EU Probe Into Chinese EV-Makers’ Alleged State Support

Probe / Caixin Explains: EU probe into Chinese EV-makers’ alleged state support Chinese electric-vehicle (EV) manufacturers’ European business has...

Caixin Global

More China-U.S. Flights Unlikely to Bring Down High Ticket Prices

The number of weekly flights between China and the U. S. will increase again next month, sparking hopes that more supply will put downward...

Caixin Global

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China to Provide Visa-Free for Six Countries - Why and The (Possible) Impact

​China is opening visa-free entry for more countries, aiming to improve its global image and become a preferred aviation hub in North Asia. Could...

Mohshin Aziz

2024 High Conviction: Air China (753 HK) - What Comes Down Must Go Up

​Air China will have a solid ROE recovery and an inexpensive P/B in 2024. It will benefit from lower US rate and Rmb appreciation. Meanwhile,...

Osbert Tang, CFA

Trip.com Q3 Quick Take: Net Inc > Consensus | Progress on Expenses | But Not a Game-Changer

Trip.com reported Q323 results that featured strong top-line growth, sharp Y/Y improvement in margins, and progress on cost control. But its Q323...

Tracking Traffic

CX Daily: EU Probe Into Chinese EV-Makers’ Alleged State Support

Probe / Caixin Explains: EU probe into Chinese EV-makers’ alleged state support Chinese electric-vehicle (EV) manufacturers’ European business has...

Caixin Global

More China-U.S. Flights Unlikely to Bring Down High Ticket Prices

The number of weekly flights between China and the U. S. will increase again next month, sparking hopes that more supply will put downward...

Caixin Global

China is opening visa-free entry for more countries, aiming to improve its global image and become a preferred aviation hub in North Asia. Could...

Air China will have a solid ROE recovery and an inexpensive P/B in 2024. It will benefit from lower US rate and Rmb appreciation. Meanwhile,...