Cathay Pacific’s business in the second half of the year was hit, and Taikoo issued a profit warning for four consecutive years

Under the circumstance of the amendments, the British capital Taikoo (019) is not immune to the impact of the business and the profit warning

 It is also the fourth consecutive year that the Pacific has issued a profit warning after 2016, 2017 and 2018. The basic profit recorded a setback, mainly due to the disruption of the business of Cathay Pacific (293) in the second half of the year, and the impairment of RMB 2.56 billion for offshore business, Port Machinery America and Gion Foods. However, due to the investment property income from the sale of the real estate business, Taikoo believes that the comprehensive basic profit for the year will continue to increase year by year.

Taikoo has turned to the wind and changed its business outlook for the second half of the year

It is expected to record a retrogression from the regular basic profit of 7.489 billion yuan last year. Taikoo said that the demonstrations in Hong Kong continued to cause damage to its real estate, aviation, trade and industrial sectors. In particular, Cathay’s passenger volume reduction and aircraft reservations were unfavorable. Therefore, Cathay Pacific’s second-half results are no longer expected to be better than the first half. The real estate business with the largest profit contribution, the retail sales of its stores continued to be affected, and Taikoo said that it has offered rent concessions to some retail tenants. In the trade and industrial sectors, the demonstration also dragged down the sales of Taikoo Resources’ retail outlets and expected the loss of the food in Gion. As for other business prospects, the outlook remains unchanged, that is, the performance of Swire Coca-Cola in Hong Kong continues to be long and the offshore industry shows signs of recovery.

Swire has also made an impairment of $2.56 billion for other businesses. The offshore business has not reached the level of recovery expected earlier, and the outlook is not very optimistic. Therefore, after reviewing the book value of the fleet of Taikoo Marine Development Group, it will be included in the revenue of about 2.12 billion yuan. Impairment expenses also included the HAECO Americas cabin design and packaging business, and the Gion Foods business, which included a total of approximately RMB 440 million in impairment charges, which were mainly accounted for by goodwill.

Profit from sales of property recorded a substantial increase in consolidated basic profit

However, as Swire Properties (1972) sold two investment properties this year, which gave Swire a record profit of 11.937 billion yuan and 1.442 billion yuan, and considering other non-recurring factors, it is expected that the comprehensive basic profit for the year will still be significantly higher than Last year’s 8.523 billion yuan.

Li Zhaobo, a senior lecturer at the China University of Business School, believes that Taikoo’s internal talents are “overriding the Administrative Officer”. British-funded enterprises are also used to dealing with politics. I believe that after learning the lesson, other businesses will not be affected too much. Mao Bo is very important, and then dealing with political risks is too pessimistic. He also pointed out that the aviation industry itself has low gross profit, especially after the current turmoil, which hinders the ticketing to and from the Mainland through the Hong Kong, including booking for next year, the situation will be rescheduled and the location will be rescheduled. Whether or not to reduce the scale has caused a major blow to Cathay. I believe that it will be resolved if the situation in Hong Kong is eased.

The disaster in Hong Kong has caused Taigu’s disaster, including the attitude of the Cathay Pacific staff, which triggered a major security risk warning from the Civil Aviation Administration of China. Later, the Chairman of the Taikoo Shi Minglun went to Beijing to solve the painting. Cathay Pacific subsequently replaced three high-level officials. In addition, he visited Hong Kong. As passengers decreased, Cathay Pacific also had a profit warning in the operating data as early as September. It is expected that the second half of the year will be inferior to the first half.


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