Juneyao Airlines (603885) 2019 First Quarterly Report Review: Costs Short-term Under Pressure, Peak Season Revenue or Up

Juneyao Airlines (603885) 2019 First Quarterly Report Review: Costs Short-term Under Pressure, Peak Season Revenue or Up

The cost of wide-body machines may increase by 4 times.

3 pcts, net profit attributable to mothers decreased by 7 in Q1 2019.


With the launch of the B787 on long-haul routes, the cost reduction effect or clearance.

The industry supply is coaxial. The company has only one B737MAX, and its growth is relatively prominent.

As the post-cycle aviation demand may turn for the better, the peak season earnings are expected to continue to rise.

The net profit attributable to mothers in Q1 2019 decreased by 7.

5%, B787 put into operation or cause the cost growth rate to be higher4.


The company achieved operating income of 41 in Q1 2019.

300 million, an increase of 14.

5%; achieve net return / deduction of non-net profit4.

0 billion / 3.

300 million, down 7.

5% / 20.

0%; the corresponding return is 0.

22 yuan, gross profit margin decreased by 2.

9 to 18.


As of now, the company operates four B787 wide-body aircraft, of which two in December and one in March.

Due to policy restrictions, the company’s first operation of a wide-body aircraft can only operate domestic routes within six months, resulting in a daily aircraft utilization rate of only 8.

71 hours.

The commissioning of wide-body aircraft or boosting operating costs also increased by 18.

8% to 33.

800 million, higher than the growth rate of income4.


Passenger load factor decreased slightly by 0.

3%, seat-km gains may drop by 武汉夜生活网 1.

2%, three rates increased by 0 for ten years.

4 points to 10.


In Q1 2019, the company requested an increase of 14.

5%, compared with the same period last year, of which the domestic line decreased by 0.

8 points.

The company’s overall RPK increased by 14.

1%, the load factor decreased slightly.

3% to 85.

2%, of which international passenger load factor decreased by 2.3% to 82.

2%, which is expected to be affected by the company’s policy to increase revenue.

With reference to the company’s passenger transportation revenue ratio in 2017 and 18, the company’s seat-kilometer revenue in the first quarter of 2019 is expected to decrease by one.


Considering the supply gap in the peak season and the improvement of demand month by month, the peak season earnings are expected to rise.

Driven by the sharp increase in interest expenses, the company’s financial expenses increased by 1 in Q1 2019.

1 to 78.37 million.

Management expenses increased by 15.

8% to 1.

100 million, leading to a three-rate maximization of 0.


The commissioning of the wide-body aircraft may cause short-term pressure on costs, and the expansion of long-haul routes will affect the expected clearance.

The first B787 wide-body aircraft was dated in October 2018, with 324 seats. In 2020, the company’s B787 fleet may rise to 10 aircraft.

Currently, B787 flies to domestic routes such as Shanghai-Shenzhen, Shanghai-Chengdu, etc., with a load factor of 89.

1%, to achieve 0 passenger kilometers income.

6 yuan is much higher than average.

Corporate Airplane Day Maximizes Single 8.

71 hours, far below the level of the three major airlines, while depreciation and take-off and landing fees exceed A320, leading to short-term costs.

Considering that the company may launch the wide-body B787 on the China-Europe long-haul routes in 2019, the impact of cost drift will be cleared.

It will continue to operate at the Capital Airport, and the main base will always be heavy or benefit.

According to Beijing’s “one city, two games” operation plan, the company will continue to operate at the Capital Airport, which will help increase Beijing’s market share.

Since 2005, the company has insisted on cultivating Shanghai’s main base. The routes are mostly between Shanghai and the top 20 domestic airport hubs.

B737MAX may affect about 4% of capacity in 2019.

In the summer and autumn of 2018, domestic flights of Pudong Airport increased by 3.

At 7%, Hongqiao Airport or the winter and spring shipping seasons have achieved constant growth, and the main hub has always been able to increase its capacity to invest in high-quality routes.

Risk factors: The macroeconomic downturn exceeds expectations; international oil prices are growing rapidly.

Earnings forecasts, estimates and investment ratings.

The short-term costs of B787 operations are under pressure, and the impact of long-distance routes may be gradually cleared in the future.

We expect net profit for 2019-2021.

300 million / 22.

0 billion / 25.

5 trillion, maintaining the EPS forecast for 2019-2021 to 0.



42 yuan.

If the B737MAX8 grounding continues until the end of the year or affects the industry’s capacity by about 4%, the company’s affiliated Jiuyuan only has one B737MAX8, and its growth is relatively prominent.

The macro economy is expected to stabilize and recover. As a post-cycle air transport demand or turn for the better, peak season earnings will continue to rise.

Maintain “Buy” rating.