$CHINA SOUTH AIR (01055.HK)$ KGI has a TA target of HKD4.95....

KGI has a TA target of HKD4.95.

China Southern Airlines is principally engaged in the operation of civil aviation, including the provision of passenger, cargo, mail delivery and other extended transportation services. The Company operates through two business segments, including Airline Transportation segment and Other segment. Airline Transportation segment consist of passenger and cargo and mail operations. Other segment includes hotel and tour operation, ground services, cargo handling and other miscellaneous services . The Company also provides services of general aviation and aircraft maintenance. The Company acts as an agency of domestic and foreign airlines, and other aviation and related business, such as personal accident insurance and agency business.

China Southern Airlines has recently unveiled a new flight route that connects Beijing and London. This development is part of the Chinese airlines' ongoing efforts to expand their overseas routes in the wake of the pandemic. Operating seven times a week, the route departs from Beijing Daxing International Airport and arrives at London Heathrow Airport. It marks the first direct route operated by a Chinese airline between these two airports and offers a travel time of approximately 10 hours to reach London. This signifies the growing international travel demand worldwide, driven by China's recovering economy and the gradual relaxation of post-pandemic restrictions.

As the summer season approaches, many popular destinations in South East Asia and other parts of Asia such as Japan, anticipate a surge in tourist arrivals. Bookings in China for trips abroad have surge as China's economy re-opens and consumers release their pent-up demand for travelling, presenting a increased in demand for international flights.

The company saw a rise in 1Q23 revenue to RMB34.06m (+58.61% YoY), compared to RMB21.47m in 1Q2022. Net Income rose 57.8% YoY to -RMB1.9b. Basic EPS eased to -RMB0.1 compared to -RMB0.27 a year ago.

According to Bloomberg, 12-month consensus tp is HK5.45.