Source: Xinhua Author: 07/23/2008
Subject Concerned: Opinion Airlines
Taifook Securities has maintained its "buy" rating for China Eastern Airlines, but down adjusted its target price from HK$5.0 to HK$3.5.
The broker pointed out in a report that constant rise of jet fuel price has brought challenges to China Eastern's operation.
It noted that short-term stimulation factors for China Eastern include possible share participation of Singapore Airlines (SIA) and Temasek or capital injection from the parent company of Air China.
Taifook Securities deemed that considering the leading status of China Eastern in Shanghai's aviation market, and the hub function of Shanghai in China, profitability of China Eastern has a large rising space.
China Eastern's market occupancy at the Shanghai Hongqiao Airport and Shanghai Pudong Airport was 37 percent and 29 percent, respectively, in 2007.