China Southern Airlines (600029): Expansion in gross profit margins enhances expectation of peak season ticket price flexibility

China Southern Airlines (600029): Expansion in gross profit margins enhances expectation of peak season ticket price flexibility

Investment highlights Estimated growth in 19Q1 passenger-kilometer revenue decreased slightly by 19Q1, and the company achieved operating income of 376.

33 ppm, an increase of 10 in ten years.


Among them, ASK grows by 11 every year.

25%, load factor 82.

88%, an annual increase of 0.

47 units.

Assume that the proportion of air passenger revenue is the same as in 18 years, which is 89.

15%, the expected passenger-kilometer income is 0.

4847 yuan, down by 1 every year.


The overall income situation is in line with expectations.

Refined management helped cost control in 19Q1, and the company’s operating cost was 320.

72 ppm, a ten-year 南京桑拿网 increase of 9.


In 18 years, the unit fuel cost (fuel cost / ASK) was zero.

14 yuan, an increase of 20 per year.

11%, meanwhile, the average price of Brent crude oil is growing by 30% per year.

58%, indicating that the unit fuel consumption is reduced once; the unit non-fuel cost (non-fuel cost / ASK) is 0.

27 yuan, down 4 each year.


The company’s refined management on the cost side has achieved results.

The gross profit margin rose, the two rates increased and stabilized in 19Q1, and the company’s gross profit margin was 14.

78%, an increase of 0 every year.

31 single, stable growth on the income side and effective management on the cost side have led to an increase in gross profit margin levels.

Selling expense ratio 4.

44%, a decline of 0 per year.

36 units.

The sum of management expenses and R & D expenses accounts for the proportion of operating income.

45%, increasing by 0 every year.

20 units.

Since the implementation of the new leasing standards in 19 years, we expect that the exchange loss benefit caused by a 1% change in RMB against the US dollar will be greater than before.

In 19Q1, the company realized net profit attributable to mothers26.

49 ppm, a ten-year increase4.


The budget is expected to be flexible in the peak season. Maintaining the “Buy” rating is expected to be in 19-21, and the company’s net profit attributable to the parent is 78.

2.5 billion, 98.

68 ppm and 123.USD 3.9 billion, with annual growth rates of 162.

06%, 26.

11% and 25.

04%, corresponding estimates are 13.

29 times, 10.

54 times and 8.

43 times.

After the company withdrew from the alliance, Tianhe continued to strengthen its cooperation with the International Airlines Division, and the increase and promotion of Guangzhou international transit passengers increased the load factor.

The commissioning of Beijing Daxing Airport will become an important opportunity for the company to realize the Guangzhou-Beijing “dual hub” strategy, and the route structure will continue to be optimized.

Expecting flexible ticket prices in the peak season, “Buy” is recommended.

Risk reminder aviation safety risk; business cycle risk; 南京夜网 oil price fluctuation risk; exchange rate fluctuation risk; policy change risk.