China Southern Airlines (1055 HK): Most Benefited from Government Supportive Measures

China Southern Airlines (1055 HK): Better Fortunes than Air China (753 HK)

Chinese Airlines and Airports: March Traffic Showed Stark Differentiation

The Week That Was in ASEAN@Smartkarma - Virus Korona, Bank Mandiri, and DBS

Coverage Rating Changes on Risks of Corona-Virus in China’s Economy and Financial System

Materials, IPO & Equity Analyst

Venkat Ramana Nandyal

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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.

Equity Bottom-Up

China Southern Airlines / Equity Bottom-Up

The current disruption in the air travel within and outbound of China is unprecedented as the government has imposed lock-down to contain the COVID-19 virus. The lock-down coincided with the Chinese New Year holidays which is the peak travel season in the country.We do not know when the air passenger traffic will return to normal; however, we expect the government to either directly or indirectly to act as a backstop in case of liquidity problems or worse bankruptcy of any airline company.     Although significant risks exist, markets are placing <a href="https://www.smartkarma.com/entities/china-southern-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1078:1" rel="noopener">China Southern Airlines (1055 HK)</a> FY20 earnings below 50% - 60%  below the consensus estimate, we expect some losses to be covered by either insurance payout or by government intervention through tax breaks, cheap loans with extended periods or loss compensation.

The current disruption in the air travel within and outbound of China is unprecedented as the government has imposed lock-down to contain the COVID-19 virus. The lock-down coincided with the Chinese New Year holidays which is the peak travel season in the country.We do not know when the air passenger traffic will return to normal; however, we expect the government to either directly or indirectly to act as a backstop in case of liquidity problems or worse bankruptcy of any airline company.     Although significant risks exist, markets are placing China Southern Airlines (1055 HK) FY20 earnings below 50% - 60%  below the consensus estimate, we expect some losses to be covered by either insurance payout or by government intervention through tax breaks, cheap loans with extended periods or loss compensation.  

China Southern Airlines: No Right Way to Price Risk