Damo lowered Meilan Airlines' profit forecasts for 2024 and 2025 by 71% and 45%, respectively.
The Zhitong Finance App learned that Damo released a research report stating that it maintains Meilan Airlines (00357)'s “in sync with the market” rating, and the target price was lowered by 21% from HK$7.1 to HK$5.6.
According to the report, Meilan Airlines' net loss for the second half of 2023 was 85 million yuan, higher than the loss of 51 million yuan in the first half of 2023, and exceeded Damo's expectations of 60 million yuan. The bank believes that due to the weak macro environment and the dilution effect of duty-free shops in Haikou, the company's duty-free shopping per capita in the second half of last year dropped to 89 yuan, a decrease of 48% per year, a decrease of 25% compared to the first half of last year.
Damo expects that the company will only achieve balance of payments in the 2024 fiscal year, while reducing Meilan Airlines' profit forecasts for 2024 and 2025 by 71% and 45%, respectively, reflecting sluggish consumer spending, declining duty-free market share, and rising costs after taking over the second phase of operations.