• Re-iterate Buy Entry – 5.45 Target – 6.00 Stop Loss – 5.2
  • China Southern Airlines Company Limited is principally engaged in the operation of civil aviation, including the provision of passenger, cargo, mail delivery and other extended transportation services. The Company operates through two business segments, including Airline Transportation segment and Other segment. Airline Transportation segment consists of passenger and cargo and mail operations. Other segment includes hotel and tour operation, ground services, cargo handling and other miscellaneous services. The Company also provides services of general aviation and aircraft maintenance. 
  • April operating data updates:
  • This is a perfect reopening play. Chinese domestic flights are a key pillar to sustain operations as the latest operating data shows ongoing recovery of passenger and cargo traffic. Although it is uncertain when regional and international passenger traffic will turn around, improving logistics segments and domestic flights provide limited downside for the stock.  
  • Updated market consensus expects loss per share to narrow to RMB0.22 in FY21 from RMB0.77 in FY20, and eventually to turn profitable with an EPS of RMB0.363 in FY22. Bloomberg consensus average 12-month target price is HK$6.29.
1055 HK (Source: Bloomberg)