Source: Xinhua Author: 12/17/2007
Subject Concerned: Opinion Airlines
Citigroup has kept its "buy" rating on China Eastern Airlines, setting the target price of the airline's H-share price at HK$7.5.
Citigroup noted that the recent around 20 percent fall of China Eastern's H-share price is mainly attributed to the remark by managerial personnel of China National Aviation Holding Company (CNAHC), parent company of Air China, who said that they will vote for the China Eastern-Singapore Airlines (SIA) deal on the pending shareholders' meeting on Jan. 8. Besides, Singapore Airlines noted that the company will not raise the bid price of HK$3.8 per share, which constitutes another reason behind China Eastern's share price decline.
However, Citigroup believes that CNAHC is still likely to baffle the China Eastern-SIA deal. As SIA has set the HK$3.8 as the ceiling bid price, only 20 percent of the current price of China Eastern's H-share, it makes easier for potential investors to join in the purchase bidding.