Dahua then upgraded the China Southern Airlines (01055) rating to “buy”, with a target price of HK$3.
The Zhitong Finance App learned that after the stock price fell, Dahua Jixian released a research report saying that after the stock price fell, Dahua then upgraded China Southern Airlines (01055) to a “buy” target price of HK$3; downgraded the Air China (00753) rating to “hold”, reflecting weak operating data since this year and involving more US routes, with a target price of HK$3.5; maintaining China Eastern Airlines (00670) rating “holds” with a target price of HK$1.8.
According to the report, the three major airlines still recorded losses in the first half of the year. China Southern Airlines was the lower limit of the loss guideline, while the medium-term losses of Air China and China Eastern Airlines were at the median level of the guideline. The bank expects that the three major mainland airlines should be able to turn profits in the third quarter due to recent weak fuel prices, but excessive supply will still be a medium-term challenge, which is not conducive to the restoration of airline balance sheets. The bank maintains a “reduced holdings” in the industry, with China Southern Airlines as its first choice.
