Long way to normal
- 1H22 results were much worse than expected; sector could stay unprofitable in FY23F
- Expect to see more red ink in 2H22 due to domestic lockdowns and travel restrictions; strict border controls will hamper international traffic in FY23F
- More equity raising could be on the cards given airlines poor liquidity and damage inflicted on their balance sheet
- Downgrade CSA to HOLD, Air China to FULLY VALUED with lower TPs; maintain HOLD on CEA with a lower TP
