Greater China Equity Long/Short Analyst

Eric Chen

Equity Bottom-Up

Beijing Capital International Airport (BCIA) / Equity Bottom-Up

Beijing Capital International Airport (BCIA)

<ul>
<li>The worst is behind Beijing Capital International Airport. We believe it is on track to achieve breakeven on quarterly basis in 2H24.</li>
<li>We see recent parking fee hikes at Daxing Airport as a signal that more will come, which is not in the price and can bring in extra option value.</li>
<li>Boom-And-Bust in China property sector is behind the airport’s share price cycle. The airport is at the cusp of a steady recovery driving mean reversion of valuation .</li>
</ul>


The worst is behind Beijing Capital International Airport. We believe it is on track to achieve breakeven on quarterly basis in 2H24.
We see recent parking fee hikes at Daxing Airport as a signal that more will come, which is not in the price and can bring in extra option value.
Boom-And-Bust in China property sector is behind the airport’s share price cycle. The airport is at the cusp of a steady recovery driving mean reversion of valuation .


Beijing Capital International Airport: On Track to Break Even

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Various statistics suggested that China's tourism and hospitality industry has staged a significant recovery during the 2024 CNY holidays, with traffic surging high double-digit.</li>
<li>While consumers are more cautious about retail product spending, they are willing to spend more on traveling. Such a trend will continue to bode well for the sector.</li>
<li>We like OTAs including <a href="https://www.smartkarma.com/entities/tongcheng-travel-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng Travel (780 HK)</a> and <a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com (9961 HK)</a> despite their YTD surge in share prices. Meanwhile, <a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener">Air China Ltd (H) (753 HK)</a> stays as the top pick.</li>
</ul>


Various statistics suggested that China's tourism and hospitality industry has staged a significant recovery during the 2024 CNY holidays, with traffic surging high double-digit.
While consumers are more cautious about retail product spending, they are willing to spend more on traveling. Such a trend will continue to bode well for the sector.
We like OTAs including Tongcheng Travel (780 HK) and Trip.com (9961 HK) despite their YTD surge in share prices. Meanwhile, Air China Ltd (H) (753 HK) stays as the top pick.


China Tourism and Hospitality Industry: Roundup of a Solid CNY

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>China's outbound tourism recovery started much later than others in the region</li>
<li>In particular, Taiwan &amp; Korea began ramping outbound travel earlier (in Q222)</li>
<li>As destinations, Thailand &amp; Vietnam recovered early, but now lag HK's growth</li>
</ul>


China's outbound tourism recovery started much later than others in the region
In particular, Taiwan &amp; Korea began ramping outbound travel earlier (in Q222)
As destinations, Thailand &amp; Vietnam recovered early, but now lag HK's growth


China's Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower

Global Mobility/Transport, Equity Long-Short

Mohshin Aziz

<ul>
<li>Chinese airports have turnaround with Xiamen, Guangzhou, and Shanghai airports reported 9M23 profits. The others (Beijing, Shenzhen, Hainan) are still lossmaking, but should turnaround soon   </li>
<li>The upcoming Winter/Spring schedule reveals international capacity at 70% of 2019's level, a catalyst for strong earnings growth, as international flights generate &gt;2.5x higher revenues   </li>
<li>
<a href="https://www.smartkarma.com/entities/xiamen-international-air-a" target="_blank" data-smartkarma-citation="entities:18544:1" rel="noopener">Xiamen International Air A (600897 CH)</a> exhibits the best value; <a href="https://www.smartkarma.com/entities/shanghai-international-airport-co-ltd" target="_blank" data-smartkarma-citation="entities:6511:1" rel="noopener">Shanghai International Airport (600009 CH)</a> is the most appealing due to its size and liquidity </li>
</ul>


Chinese airports have turnaround with Xiamen, Guangzhou, and Shanghai airports reported 9M23 profits. The others (Beijing, Shenzhen, Hainan) are still lossmaking, but should turnaround soon   
The upcoming Winter/Spring schedule reveals international capacity at 70% of 2019's level, a catalyst for strong earnings growth, as international flights generate &gt;2.5x higher revenues   

Xiamen International Air A (600897 CH) exhibits the best value; Shanghai International Airport (600009 CH) is the most appealing due to its size and liquidity 


Chinese Airports at Inflection Point, Low Risk and High Visibility Growth Sector

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

Hainan Meilan International Airport / Event-Driven

<ul>
<li>On 30 April, Haikou Meilan International Airport entered a SPA with <a href="https://www.smartkarma.com/entities/hainan-airport-infrastructure-co-ltd" target="_blank" data-smartkarma-citation="entities:1233:1" rel="noopener">Hainan Airport Infrastructure (600515 CH)</a> to sell its <a href="https://www.smartkarma.com/entities/hainan-meilan-international-airport-company-limited" target="_blank" data-smartkarma-citation="entities:12545:1" rel="noopener">Hainan Meilan International Airport (357 HK)</a> 50.19% stake at RMB9.85 (HK$10.62).</li>
<li>The SPA precondition is satisfied, and the SPA will be completed within 20 business days. Completion will trigger an unconditional MGO at HK$10.62.</li>
<li>Tendering is likely to be low as the offer is unattractive. At the last close and for a mid-February 2026 payment, the gross/annualised spread is 0.2%/1.1%.</li>
</ul>


On 30 April, Haikou Meilan International Airport entered a SPA with Hainan Airport Infrastructure (600515 CH) to sell its Hainan Meilan International Airport (357 HK) 50.19% stake at RMB9.85 (HK$10.62).
The SPA precondition is satisfied, and the SPA will be completed within 20 business days. Completion will trigger an unconditional MGO at HK$10.62.
Tendering is likely to be low as the offer is unattractive. At the last close and for a mid-February 2026 payment, the gross/annualised spread is 0.2%/1.1%.


Meilan Airport (357 HK): SPA Precondition Satisfied, Setting up an Unconditional MGO at HK$10.62

China

Beijing Capital International Airport Company Limited operates both aeronautical and non-aeronautical business in the Beijing airport.  The Company provides aircraft movement and passenger service facilities, safety and security services, fire-fighting services, and ground handling services.  In addition, Beijing Capital operates duty free and other retail shops and leases properties.

Beijing Capital International Airport (BCIA) (694 HK)

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Beijing Capital International Airport (BCIA) (694 HK)

Beijing Capital International Airport: On Track to Break Even

Beijing Capital International Airport is poised for a steady recovery, with potential for breakeven by 2H24 and paving the way for mean reversion...

Eric Chen

China Tourism and Hospitality Industry: Roundup of a Solid CNY

China's tourism industry sees a strong recovery during the 2024 CNY holidays, with a high double-digit traffic surge. OTAs like Tongcheng and...

Osbert Tang, CFA

China's Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower

In this insight we compare China's progress toward restoring outbound tourism activity to the progress shown by other major tourist sources in the...

Tracking Traffic

Chinese Airports at Inflection Point, Low Risk and High Visibility Growth Sector

Chinese airports have underperformed the CSI 300 despite a successful turnaround. There will be a surge in lucrative international flights that...

Mohshin Aziz

Meilan Airport (357 HK): SPA Precondition Satisfied, Setting up an Unconditional MGO at HK$10.62

Tendering is likely to be low as the offer is unattractive. At the last close and for a mid-February 2026 payment, the gross/annualised spread is...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Beijing Capital International Airport: On Track to Break Even

​Beijing Capital International Airport is poised for a steady recovery, with potential for breakeven by 2H24 and paving the way for mean reversion...

Eric Chen

China Tourism and Hospitality Industry: Roundup of a Solid CNY

​China's tourism industry sees a strong recovery during the 2024 CNY holidays, with a high double-digit traffic surge. OTAs like Tongcheng and...

Osbert Tang, CFA

China's Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower

In this insight we compare China's progress toward restoring outbound tourism activity to the progress shown by other major tourist sources in the...

Tracking Traffic

Chinese Airports at Inflection Point, Low Risk and High Visibility Growth Sector

​Chinese airports have underperformed the CSI 300 despite a successful turnaround. There will be a surge in lucrative international flights that...

Mohshin Aziz

Meilan Airport (357 HK): SPA Precondition Satisfied, Setting up an Unconditional MGO at HK$10.62

Tendering is likely to be low as the offer is unattractive. At the last close and for a mid-February 2026 payment, the gross/annualised spread is...

Arun George

Beijing Capital International Airport is poised for a steady recovery, with potential for breakeven by 2H24 and paving the way for mean reversion...

China's tourism industry sees a strong recovery during the 2024 CNY holidays, with a high double-digit traffic surge. OTAs like Tongcheng and...

Chinese airports have underperformed the CSI 300 despite a successful turnaround. There will be a surge in lucrative international flights that...