Credit Suisse has released a research report stating that it maintains a 'buy' rating for Cathay Pacific Air (00293), and that its first-half performance was not as weak as the market had expected, with a target price of HKD 9.8.
The bank believes that the group's passenger yield will continue to decline due to competition on short-haul routes and normalization of long-haul routes, but the cargo yield may be stronger due to seasonal factors, and this trend may continue into the second half of the year.
Credit Suisse estimates that the group's profit in the second half of the year will be stronger than in the first half, and that while its operating profit has peaked for the year, its net profit will benefit from a recovery in Air China Limited's (00753) profitability.
