Category: Money tips Release Date: 2006-02-10
1, operational data analysis:
Passenger: the company's launch in 2006 passenger capacity increased by 10% to 14.1 billion passenger kilometers, passenger in an increase of 5 B373-800, 2 Jia B767-200, another transformed into two B757 freighters and has been put into operation, the net an increase of 5 aircraft, the total passenger volume will reach 45; passenger traffic increased 11% to 9.8 billion passenger kilometers, the actual completion of passenger growth below the industry average (from January to November passenger traffic growth of the industry close to 15%). Segments, the domestic, regional and international routes, passenger traffic growth of 9.3%, respectively, 14.6% and 49.1% in the domestic routes, out of aviation fuel costs, and profits difficult to take into account, the company carried out with caution capacity investment, by maintaining a high level of fares efforts to stabilize domestic routes earnings; in regional airline, despite increased competition Dragonair and China Eastern, Shanghai Airlines still get a high market growth, developments are more encouraging, but the overall point of view , regional airline fare level can hardly be optimistic; in international routes, due to the implementation of a number of months of international charter flights (Philippines route), in 2006 with higher growth in passenger traffic on international routes, reaching 49% of the international line of high growth is expected to continue until at least 07 In the first quarter. The current domestic passenger lines in the total passenger traffic is still in possession of more than 85% share of domestic routes in 2006 due to investment and real output growth is relatively low, the company in 2006 to enhance the overall load factor slower, integrated load factor reached 69.1% year on year in 2005 an increase of 68.5% only 1%, below the industry growth rate generally.
Cargo areas: in 2006 the company introduced a B747, 1 Jia MD11, and has two B757 aircraft conversion to complete, all-cargo aircraft total to five, the number of freighters to increase rapidly; of the major new capacity is basically into the international long-haul operations, annual cargo capacity to reach 960 million ton-km, an increase of 97%. Cargo in the main business structure, the proportion rising in 2006 the company completed AFTK reached 594 million ton-km, an increase of 91% of the total turnover has risen to 40%, due to flat revenue freight ton-km passenger unit revenue is only about 1 / 3, the company expects 2006 revenue to total revenue ratio of freight in 2005 would be around 9.5% increase to 16%, and in 2007 continued to increase to 20%.
Hang from the "Eleventh Five-Year" Development Planning in the next few years, the introduction of two annual all-cargo aircraft until 2010 to reach 10 over the next few years, Shanghai Airlines Cargo annual compound growth of more than 20%.
International freight forwarding industry are the main cargo business growth: in 2006 the domestic, regional and international routes ton-km freight charges grew by 18.4%, 23.4% and 633%, mainly cargo capacity of basic inputs of international long routes, including Shanghai - Frankfurt, International cargo accounted for the completion of the total cargo volume increased from early 2006 about 18% raised to the end of 69%. International freight growth will lead to higher freight prices; since the beginning input capacity faster, with EVA Air's cooperation has not yet depth of 2006 International Cargo load factor decreased by 6.7%, with only about 57%, with the outside of the network sound, a joint venture operations in depth, is expected to Shanghai Airlines International Cargo freight and carriage rates will rise.
2,06 for the financial index analysis: In the load factor is expected to rise slowly, the rate of return indicators are the main points of concern: From 2006 on flights operating point of view, passenger unit revenue passenger kilometers, 1-3 significantly enhance the sub-quarter-quarter revenue passenger kilometers increased by 0.1%, respectively, 5.6% and 11.7%, overall show, "season even more vigorously," the characteristics of 2006 was mainly due to the level of fuel surcharges continued to increase, and the 2-3 quarter, the holiday buying season were significantly increased integrated fare level (06 Aviation Enterprises in general are enjoying lower fares during the peak season discounts and levying a fuel surcharge of benefits). Cargo, with the opening of international freight routes, freight tariffs more stable, in 2006 1-3 quarter revenue tonne-kilometers of cargo transport units remained at 2 yuan, fluctuations reduced; in view of opening more international freight routes, such as Shanghai -- Frankfurt route will be more benefit from foreign freight Christmas season, the company expects the fourth quarter of 2006 will remain a steady increase in the overall freight.
3,07-year forecast and investment analysis: the major considerations include the following:
Capacity delivery areas: passenger traffic is expected in 2007 will introduce a seven B737-800, terminated their tenancies in a B757-200, a net increase of six aircraft, with a total seating capacity increase of 12.2%, passenger capacity would be released around 10% -11%; freight, operating lease two MD11, the total cargo volume will reach seven, cargo and mail tonnage carried increased 62.1%, investment continued to increase cargo capacity.
Load factor continued to rise: In view of capacity to run more slowly, load factor is expected to continue to grow 1% -2%, due to the high fares on the route strategy will continue, load factor increased by a relatively slow; cargo and mail load factor is expected to rise slightly.
Freight business in 2007 will soon be profitable: As the 2006 beginning of a shipping company, start-up investment is relatively high (from the third quarter of the reports, the company operating expenses and management fees respectively, over the same period in 2005 increased 43.29 million and 106.64 million, an increase of 8% and 71.4%; from history, the flight management costs quite robust in recent years, basically stable at around 2.1-2.3 million, is expected to increase in administrative expenses in 2006 a significant part of the company's opening of a new freight costs), cargo business in 2006 hard to achieve overall profitability; in 2007 with the freight business in depth, one-time costs and opening costs will not continue to increase, and the carriage of cargo freight rates are expected to continue to enhance, in the current oil price level is expected to freight business is expected to achieve more than 100 million profits.
Lower oil prices and fuel surcharges are lower: in the second quarter is expected to fuel prices is expected to further downward adjustment is expected to reach 300 yuan / ton, so, in 2007 and 2006 CAO average price is expected to 5885 yuan / ton flat; with the CAO prices, fuel surcharges are likely to continue to cut about 20%, so, in 2007 the level of an integrated fuel surcharge will be very likely in 2006. In general, the drop in oil prices is relatively rigid, while on the flight control at the level of fares remained fairly stable, is expected to decline in fuel costs the positive factors that will be able to fully compensate for lower fuel surcharges of negative impact.
Performance and investment analysis: load factor continued to rise, revenue passenger kilometers relatively strong freight transport business will soon be profitable, to accelerate yuan appreciation, aircraft main asset depreciation policy adjustments to reduce the cost of aircraft is expected to last 07-08 years, earnings per share were 0.22 yuan and 0.48 yuan, corresponding to PE, respectively 20 times and 9 times, maintain the "Recommended-A" investment rating, target price of 4-6 yuan, corresponding to 2007 nearly 18-27 times PE.
