2023-07-18 04:40:37
Cathay Pacific (293) issued a profit alert at noon last Friday. The stock price rose 5% in a single day to close at 8.5 yuan. It has not changed this year. The company’s market value is 54.7 billion yuan. Taikoo A (019; B: 087) only rose 1% in a single day, closing at 62.45 yuan before, and still fell 9% this year. The total market value of A+B is 83.3 billion yuan, which is only 50% higher than Cathay Pacific. The investment value of Swire A is far higher than that of Cathay Pacific.
1) In the 2022 fiscal year (end of December), Cathay Pacific lost 6.68 billion yuan, accounting for 5 billion yuan in the first half of the year and 1.68 billion yuan in the second half. Profitable profit means that in the first half of this year, it can earn 4 billion to 4.5 billion yuan, of which 1.9 billion yuan is non-cash items, which come from the dilution of Cathay Pacific’s holding of Air China (753) from 18.13% to 16.26% (because Air China has issued new A shares).
Cathay Pacific’s profit forecast for this year is 6.5 billion yuan, with a forecasted PE of 8.4 times and a PB of 0.78 times; borrowings are still high, and the forecasted dividend rate is only symbolic. The valuation of Cathay Pacific is far lower than that of Swire.
Up 42%
2) Swire Pacific accounts for 45% of Cathay Pacific. Cathay Pacific turned from profit to loss in the first half of this year. This change alone is enough to cause Swire Pacific’s profit to surge by 200% year-on-year in the first half of this year. The full-year profit forecast is 10 billion yuan (6.7 yuan per A share EPS), which has increased by 1.4 times, excluding the profit of 32.8 billion yuan from the sale of Swire Pacific Holdings (it is unknown whether the transaction can be completed before the end of December this year). In terms of regular dividends, the dividend rate is 5%.
Including the profit from the sale of Swire Pacific Holdings, the NAV forecast per A share is 194 yuan, and the PB is only 0.32 times. After the completion of the sale of US assets, a special dividend of 8.12 yuan (equivalent to 13% of the current price) will be distributed per A share. Excluding net, the PB is only 0.28 times. The net debt ratio is only 12%, which is very safe.
The total market value of Swire A+B is 83.3 billion yuan. The market value of Cathay Pacific is 24.6 billion yuan, and the market value of 82% of Taidi is 91.2 billion yuan, which is already worth 115.8 billion yuan.
Cathay Pacific closed at 8.49 yuan before, with a target of 9.5 yuan, a potential increase of 12%. Swire A closed at 62.45 yuan before, and following excluding the special interest of 8.12 yuan, the theoretical price was 54.33 yuan, with a target of 77 yuan, and the actual potential increase was 42%. Excluding the net price of 77 yuan, the PB is still only 0.4 times, only half of Cathay Pacific. Citigroup (June) is at 81.5 yuan, and Lyon (June) is at 68 yuan.
Celebrity quotes revisited: “You don’t have to wait until the stock price hits the bottom to buy stocks.” (Buffett, 93 years old)
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Note: The columnist’s remarks do not represent the position of this website
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