Cathay Pacific Airways (00293), which lost its top three in the world’s best airlines due to poor management, dragged its parent company, Taikoo (00019)
Taikoo issued a profit warning yesterday, saying that after considering all the circumstances, it is expected that the Group’s recurring basic earnings will be less than 18 years, mainly due to its expected performance.
The securities industry is bearish on the future trend of passenger and cargo traffic of Cathay Pacific.
When Swire published its interim report in August this year, it mentioned the outlook on the business. At that time, it indicated that Cathay Pacific’s performance in the second half of the year was generally better than that in the first half of the year.
The booking of the aircraft is unfavorable
However, according to the latest assessment, the demonstrations in Hong Kong continue to reduce the number of Cathay Pacific passengers and adversely affect the booking of the aircraft. Therefore, it is no longer expected that Cathay Pacific’s second half results will be better than the first half.
The Group’s latest review of its business prospects includes other aspects. Among them, in the trade and industrial sectors, the sales of Swire Resources’ retail outlets continued to be affected by the demonstrations in Hong Kong, and it is expected that Gion Foods will record a larger loss. The real estate sector also continued to suffer from the demonstrations, and the retail sales of its stores continued to be affected. The group has offered rental concessions to some retail tenants.
As for its offshore industry, although there have been some signs of recovery, it has not reached the previous expectations and is now less optimistic about its prospects. As the prospects of the offshore industry have an important impact on the value of the fleet of the Taikoo Marine Development Group, the book value of the fleet has been reviewed. After the review, the company’s consolidated profit for the year of 1999 is expected to be included in the current estimated impairment of approximately RMB 2.12 billion.
In addition, Swire is also expected to account for the estimated impairment loss of approximately RMB 440 million for the Hong Kong Aircraft (America) Cabin Design Package Business and the Gion Food Business, which are mainly related to the goodwill included in the consolidated statement of financial position.
Securities analyst Tan Langwei said that real estate investment and aviation business have contributed more to Taikoo, and its changes have affected financial performance. However, the above two industries are currently unclear and are dragging down the company’s performance. Under the social turmoil, and many countries issued travel warnings to Hong Kong, it is expected that Cathay’s business is difficult to be optimistic.
The stock price is sluggish
Taikoo’s share price closed at 76.6 yuan yesterday. Tan believes that its current price has not yet deviated from the bottom of the long-term stock price, I believe that in the short term will fall back to 73 yuan level, and underperformed the market, investors should take the high position.
Shen Qinghong, director of Tengyi Fund Management Investment Management, said that Taikoo was troubled by the local and the periphery, and it was hard to say when it would be better. Among them, social unrest in Hong Kong has made it difficult to collect business in office buildings and shopping malls.
In addition, Cathay Pacific has been affected by the global economic slowdown due to the trade war, and it is expected that passenger and cargo transportation will not recover in the future. Shen said that the above two factors are not controllable by the company, and it is estimated that it will not last long. The stock price is under pressure. If the stock market sentiment deteriorates, the stock price of Taikoo will fall by a large margin.