SEHK:753

Stock Analysis Report

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Executive Summary

Air China Limited, together with its subsidiaries, provides air passenger, air cargo, and airline-related services in Mainland China, Hong Kong, Macau, Taiwan, Europe, North America, Japan, Korea, the Asia Pacific, and internationally.


Snowflake Analysis

High growth potential and fair value.


Similar Companies

Share Price & News

How has Air China's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 753 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-5.4%

753

-2.3%

HK Airlines

-5.8%

HK Market


1 Year Return

-41.5%

753

-34.2%

HK Airlines

-2.9%

HK Market

Return vs Industry: 753 underperformed the Hong Kong Airlines industry which returned -33.8% over the past year.

Return vs Market: 753 underperformed the Hong Kong Market which returned -2.4% over the past year.


Shareholder returns

753IndustryMarket
7 Day-5.4%-2.3%-5.8%
30 Day-2.9%-1.2%9.3%
90 Day-5.2%-3.8%11.4%
1 Year-40.9%-41.5%-30.5%-34.2%1.1%-2.9%
3 Year-34.5%-37.2%-33.0%-38.9%4.0%-7.2%
5 Year-40.8%-45.5%-46.9%-52.6%7.6%-10.3%

Price Volatility Vs. Market

How volatile is Air China's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Air China undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 753 (HK$4.77) is trading below our estimate of fair value (HK$18.71)

Significantly Below Fair Value: 753 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 753 is unprofitable, so we can't compare its PE Ratio to the XA Airlines industry average.

PE vs Market: 753 is unprofitable, so we can't compare its PE Ratio to the Hong Kong market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 753's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 753 is good value based on its PB Ratio (0.7x) compared to the XA Airlines industry average (0.8x).


Next Steps

Future Growth

How is Air China forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

120.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 753 is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.6%).

Earnings vs Market: 753 is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: 753's is expected to become profitable in the next 3 years.

Revenue vs Market: 753's revenue (20.4% per year) is forecast to grow faster than the Hong Kong market (10.9% per year).

High Growth Revenue: 753's revenue (20.4% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 753's Return on Equity is forecast to be low in 3 years time (7.3%).


Next Steps

Past Performance

How has Air China performed over the past 5 years?

-5.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 753 is currently unprofitable.

Growing Profit Margin: 753 is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: 753 is unprofitable, and losses have increased over the past 5 years at a rate of 5% per year.

Accelerating Growth: Unable to compare 753's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: 753 is unprofitable, making it difficult to compare its past year earnings growth to the Airlines industry (-24.9%).


Return on Equity

High ROE: 753 has a negative Return on Equity (-1.67%), as it is currently unprofitable.


Next Steps

Financial Health

How is Air China's financial position?


Financial Position Analysis

Short Term Liabilities: 753's short term assets (CN¥26.2B) do not cover its short term liabilities (CN¥81.7B).

Long Term Liabilities: 753's short term assets (CN¥26.2B) do not cover its long term liabilities (CN¥115.6B).


Debt to Equity History and Analysis

Debt Level: 753's debt to equity ratio (57.1%) is considered high.

Reducing Debt: 753's debt to equity ratio has reduced from 102.9% to 57.1% over the past 5 years.

Debt Coverage: 753's debt is well covered by operating cash flow (43.2%).

Interest Coverage: 753 is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet


Next Steps

Dividend

What is Air China current dividend yield, its reliability and sustainability?

1.03%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 753's dividend (1.03%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.31%).

High Dividend: 753's dividend (1.03%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.74%).


Stability and Growth of Payments

Stable Dividend: 753 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are stable.

Growing Dividend: 753 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: 753 is not paying a notable dividend for the Hong Kong market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 753's dividend in 3 years as they are not forecast to pay a notable one for the Hong Kong market.


Next Steps

  • Explore strong dividend paying companies in the Transportation industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

5.5yrs

Average management tenure


CEO

Zhiyong Song (55yo)

6.5yrs

Tenure

Mr. Zhiyong Song serves as the Chairman of Executive Board at Aircraft Maintenance and Engineering Corporation. Mr. Song has been the President of Air China Limited since January 28, 2014. He has been an E ...


CEO Compensation Analysis

Compensation vs Market: Zhiyong's total compensation ($USD0.00) is below average for companies of similar size in the Hong Kong market ($USD779.76K).

Compensation vs Earnings: Zhiyong's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Zhiyong Song
Vice Chairman & President6.5yrsno datano data
Tiexiang Liu
VP & COO5.25yrsCN¥1.13mno data
Feng Xiao
Chief Accountant6yrsno datano data
Hua Zhang
General Legal Counsel2.92yrsno datano data
Chuanyu Xu
Chief Safety Officer11.5yrsCN¥1.08mno data
Feng Gang
Non-Executive Director0.17yrno datano data
Qiang Long
Chief Service Officer7.58yrsno datano data
Yingnian Wang
Chief Pilot5.67yrsno datano data
Jiliang Ni
Chief Engineer0.50yrno datano data
Feng Zhou
Joint Company Secretary & Board Secretary2.92yrsno datano data
Ho Yin Huen
Joint Company Secretary0.25yrno datano data
Chongxian Ma
Vice President10.25yrsCN¥881.00kno data

5.5yrs

Average Tenure

55.5yo

Average Age

Experienced Management: 753's management team is seasoned and experienced (5.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Zhiyong Song
Vice Chairman & President6.5yrsno datano data
Feng Gang
Non-Executive Director0.17yrno datano data
Hon chung Hui
Independent Non-Executive Director5.17yrsCN¥200.00kno data
Jianjiang Cai
Chairman6.42yrsno datano data
Xiaohang Zhao
Chairman of the Supervisory Committee & VP0.58yrCN¥655.00kno data
Patrick Healy
Non-Executive Director0.58yrno datano data
Chaofan He
Supervisor11.58yrsno datano data
Yanjun Xiao
Supervisor9.08yrsCN¥536.00kno data
Dajin Li
Independent Non-Executive Director4.58yrsCN¥200.00kno data
Xiaokang Wang
Independent Non-Executive Director3.17yrsCN¥60.00kno data
Yasong Xue
Non-Executive Director2.33yrsCN¥989.00kno data
Hongyi Duan
Independent Non-Executive Director0.25yrno datano data

3.6yrs

Average Tenure

57.5yo

Average Age

Experienced Board: 753's board of directors are considered experienced (3.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Air China Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Air China Limited
  • Ticker: 753
  • Exchange: SEHK
  • Founded: 1988
  • Industry: Airlines
  • Sector: Transportation
  • Market Cap: HK$101.350b
  • Shares outstanding: 14.52b
  • Website: https://www.airchina.com.cn

Number of Employees


Location

  • Air China Limited
  • No. 30, Tianzhu Road
  • Airport Industrial Zone
  • Beijing
  • Beijing Province
  • 101312
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AICA.FOTCPK (Pink Sheets LLC)YesForeign Shares-Foreign ListedUSUSDDec 2004
753SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDDec 2004
AIRCLSE (London Stock Exchange)YesForeign Shares-Foreign ListedGBGBPDec 2004
AD2DB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURDec 2004
AD2WBAG (Wiener Boerse AG)YesForeign Shares-Foreign ListedATEURDec 2004
753SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDDec 2004
753SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDDec 2004
601111SHSE (Shanghai Stock Exchange)Domestic SharesCNCNYAug 2006
601111XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect)Domestic SharesCNCNYAug 2006
AIRY.YOTCPK (Pink Sheets LLC)SPON ADRUSUSDJan 2007

Biography

Air China Limited, together with its subsidiaries, provides air passenger, air cargo, and airline-related services in Mainland China, Hong Kong, Macau, Taiwan, Europe, North America, Japan, Korea, the Asia Pacific, and internationally. The company operates through Airline Operations and Other Operations segments. It provides aircraft engineering, airport ground handling, and other airline-related services. The company is also involved in the import and export trading activities; and provision of cabin, airline catering, air ticketing, human resources, aircraft overhaul and maintenance, and financial services. It operates approximately 699 passenger aircraft. The company was founded in 1988 and is headquartered in Beijing, the People’s Republic of China. Air China Limited is a subsidiary of China National Aviation Holding Corporation Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/15 12:36
End of Day Share Price2020/07/15 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.