Spring Airlines (601021): Strong demand for international flights Q3 performance slightly exceeded expectations


Spring Airlines (601021): Strong demand for international flights Q3 performance slightly exceeded expectations

Investment suggestion: The company’s cost control is the best among the listed airline companies, and the moat is deep.

Seven aircraft are expected to be launched in the fourth quarter, and capacity growth will accelerate.

The company’s EPS is expected to be 2 in 19/20/21.



99 yuan, budget aviation market is broad, given 19x 25x PE, target price of 52 yuan, maintain “highly recommended-A” rating.

The company released three quarterly reports with slightly better results than expected.

In the first three quarters of 19, revenue was 115.

6.4 billion (+13.

6% YOY), net profit attributable to mother 17.

1.9 billion (+21.

7%), net of non-attributed net profit of 15.

8.7 billion (+24.

7% YOY), with an expected ROE of 12.

2%, basic EPS is 1.

87 yuan.

Q3 single-quarter revenue reached 44.

1.5 billion (+24.

7% YOYO), net profit attributable to mother 8.

6.5 billion (+26.

1% YOY), deducting non-attributed net profit 8.

6.2 billion (+34.

(1% YoY), performance exceeded expectations.

The Q3 passenger load factor continued to improve, and the company’s operating data performed well.

During the summer season, the company’s capacity began to accelerate significantly, and overall supply and demand went up. ASK, RPK, and load factor rose across the board.

In Q3 19, the company’s ASK was at least +13.

33%, RPK exceeds +16.

4%, 都市夜网 passenger load factor increased to 91.

94%, ten years +2.


Among them, the international route RPK growth rate is 21.

44%, Japanese, Korean and Thai demand remained strong.

The Q3 company introduced a total of two A320NEOs. We judge that the fourth quarter will be the peak period for aircraft delivery and that seven aircraft will be introduced.

Combined with the winter and spring of 19, the capacity growth rate is expected to reach 16% in the fourth quarter to the first quarter of next year.

Q3 cost control continued to strengthen, and the proportion of three fees continued to decrease.

Q3 single-quarter operating costs were 33.

25 trillion, the unit ASK operating cost is 0.

2913 yuan, at least -2.8%, the first is that oil prices remain low (Q3 average oil price is at least -18.

2%) and better cost control.

In addition, the company’s three fees continued to decrease, and Q3 sales expenses accounted for -0 in revenue.

04pcts, ten years of management expenses -0.

09pcts, ten years of financial expenses-0.


Other benefits (mainly navigation subsidies) amounted to 2.

4 trillion, basically stable.

The cost advantage of large-scale single construction is more and more obvious.

Affected by oil exchange, the company’s performance can remain stable during the economic downturn.

Due to the higher fuel efficiency of budget airlines and the increase in unit fuel cost, the risk of oil price fluctuations is relatively small.

The company has the advantage of high load factor, so the fuel surcharge has a better ability to shift oil prices and increase costs (18% coverage in 92%).

USD risk budget (about 1/10 of the three major airlines), foreign exchange risk is small.

In the third quarter, the RMB depreciated against the US dollar2.

83%, Spring Airlines’ exchange loss loss far exceeds the three major airlines.

Risk reminder: Oil prices have increased sharply, and competition between Japan and South Korea has intensified.