MS 摩根：中国国航研究 报告（英文）

Air China Limited Lowering Price Target and Earnings Estimates

March 21, 2007 15页

HK$5.25 from HK$5.53 on a 6%-9% cut to our reported
earnings for F2007-08e. As our price target indicates
8% downside potential from the current level, we
maintain our Equal-weight rating on the stock. While we
believe Air China is the best Chinese airline in our
coverage universe given its clear long-term strategy and
good market position, we believe the valuation is too rich
to chase the stock now. We would become more bullish
on the stock if the price were to correct to below 8.0x
EV/EBITDA or 1.6x P/B multiples, what we consider to
be a more attractive entry point.
What's New: Air China released surprising F2006
results on March 20, 2007. Reported EPS of Rmb0.26
was below our and market consensus expectations by
16%-13%. Higher-than-expected cost pressures (+23%
yoy or +17% ex-jet fuel) remind us not to be overly
optimistic on the operational performance of Chinese
airlines, even including the best-managed players. We
remain concerned about high valuations amid an
increasingly competitive environment for most Chinese
airlines (for details, see our note: China Aviation –
Difficult to Fly on Heavy Valuations, March 13, 2007).
Implications: Our revised price target of HK$5.25 is
predicated on 9.5x 2007e EV/EBITDA, which translates
into 2.0x P/B and 18.3x P/E on our 2007 estimates, and
implies premiums of 27%-73% to major Asia-Pacific
carriers such as Singapore Airlines (SIA) and Cathay
Pacific (CPA).
Morgan