德意志银行-xx公司研究-chinese airlines favorable fx and fuel trends partially offset international yield pressure-20170713-deutschebank.pdfVIP

Chinese Airlines Deutsche Ban Markets Research Asia Industry Date China Chinese Airlines 13 July 2017 Transportation Air Forecast Change Favorable FX and fuel trends partially offset international yield pressure Vincent Ha, CFA Limited excitement despite slower RMB depreciation and fuel appreciation Chinese airlines’ H share prices have risen 31-53% YTD (vs. HSCEI’s 14%), Research Analyst despite soft international yields and a jump in fuel price vs. 2016. We attribute +852-2203 6247 outperformance to expectations for slower RMB depreciation and fuel price appreciation from now on. Although we see potential earnings upside due to Joe Liew, CFA lower FX loss forecasts, we arent overly excited, given tough competition on Research Analyst international routes. We prefer Buy-rated China Eastern-H and Spring Airlines. +81-3-5156-6725 Lower FX loss to offset weaker core FY17E profitability Fei Sun, CFA The Big Three airlines have been cutting their USD debt exposure, from over 70% Research Analyst at the peak level to under 50% by year-end 2016. Together with the slower pace +852-2203 6130 in RMB depreciation, we now see more upside potential to FY17-19E reported earnings, on lower FX losses, and we raise our FY17-18E reported net profit