China Southern Airlines (600029) first quarterly report in 2019: performance growth increased 4.

1% future strong season is expected to maintain a “strong push” rating

China Southern Airlines (600029) first quarterly report in 2019: performance growth increased 4.

1% future strong season is expected to maintain a “strong push” rating

Company announcement for the first quarter of 2019: Attributable net profit will increase by 4 per year.

1% 1) The report initially realized operating income of 37.6 billion yuan, an increase of 10 in ten years.

4%; net profit attributable to mother 26.

4.9 billion, an annual increase of 4.


2) The deducted non-net profit decreased slightly by 2%.

18Q1 RMB appreciation3.

8%, 19Q1 appreciation 1.

9%, the exchange rate sensitivity is enlarged due to the consolidation of operating leases (the company is expected to increase by 1.

5 times or so), we estimate that in 19Q1, the exchange rate of 15 will be realized.

1 ppm, 18Q1 is 13.

700 million, an increase of 1 every year.

400 million yuan, deducting non-deductible net profit13.

100 million, a slight decline of 2% each year.

3) Impact of the new accounting standards: The implementation of the new accounting standards from January 2019 will affect the company’s statements: total assets increased by 44.8 billion yuan, debts increased by 48.7 billion yuan, owner’s equity decreased by 3.9 billion yuan, and the Q1 asset-liability ratio increased by approximately 3.

8 up to 73.


Regarding exchange rate sensitivity, every 1% fluctuation of RMB against USD will bring 6.


RMB 800 million exchange gain / loss (before tax).

Revenue from seat kilometers decreased slightly in the first quarter with ASK growth rate of 11.

3%, RPK growth rate of 12.

9%, load factor increased slightly by 0.

47 up to 82.


We measure a slight decrease in passenger-kilometer revenue

2%, seat kilometer revenue fell 0.


Among them, due to the company’s transformation of economy class and the increase in the number of seats in wide-body aircraft, the flight distance has been affected by 2%. 杭州夜网 Excluding this factor, revenue in the first quarter realized growth.

The cost of deducting oil per seat kilometer is reduced by 0 every year.

8% 1) The average price of domestic comprehensive mining costs in the first quarter was 4,756 yuan / ton, a slight decrease of 3%.

8%, measuring the company’s fuel costs 102.

700 million, an increase of 9 in ten years.


2) The cost of deducting oil per kilometer per seat has fallen for ten years.

8%, the decline is slightly more than the seat-km gain.
3) On the expense side, the company’s sales expense ratio is reduced by 0.
4pct, management expenses increased slightly by 0.

2pct, the deduction of foreign exchange finance costs increased by 1 due to the adjustment of the new standard.

6 points.

However, under the new standard, the index expense will be higher and lower than the linear straight line.

Adjust the revenue management plan. In the future peak season, the company can adjust the revenue management and carry out overall planning.

For higher long-distance routes or strategies such as reducing the number of flights to reduce the quota, improve the encrypted services for high-quality routes to obtain higher returns.

We believe that the company has the largest fleet size in China. Once the business strategy shifts from scale expansion to quality improvement, it will release performance elasticity in the peak season.

Investment suggestions: 1) Pay attention to the Boeing incident or the impact of unexpected supply. We expect to bring a gap in supply and demand to the industry in the peak season. The company’s largest fleet adopts a strategy of reducing and maintaining high levels, which can bring about full elastic release.

2) Long-term optimistic about the company’s future success in Beijing Daxing Airport.

The company’s current market share in Beijing is about 15%. It is expected that the company’s 40% share of Daxing Airport will be expanded in the future, which will help the company to explore the high-yield market in Beijing.

3) We maintain earnings forecasts of 8.9 billion and 11.5 billion for 2019-20, which is equivalent to a PE of 11-20 in 19-20.

7 and 9.

1x, at a relatively low level in history, highlighting the “strong push” level.

Risk warning: The price of oil has increased sharply, the exchange rate has risen sharply, and the Boeing incident has not brought substantial supply impact.