bacharachcrystal| Big Bank Rating| UBS: Air China's first-quarter net loss significantly fell short of expectations, giving it a "sell" rating

UBS issued a report stating thatbacharachcrystalAir China's revenue under Chinese accounting standards in the first quarter was 40.1 billion yuan, a year-on-year increase of 60%, but recorded a net loss of 16bacharachcrystal.70 million yuan, narrowed from 2.93 billion yuan in the same period last year, which was significantly lower than the bank and market expectations. The company did not provide an updated outlook. In addition, Air China announced the purchase of 100 C919 aircraft from Comac for a total listing price of US$10.8 billion. The bank believes the actual price will be lower because Comac offers significant discounts. The aircraft will be delivered from 2024 to 2031.

The bank expects that while supply and demand dynamics improve and the outlook for air ticket prices may not be as strong as some investors originally expected, it is estimated that Air China's new aircraft orders may put pressure on market sentiment. Taking into account Air China's poor profit expectations and aircraft purchase announcements, the bank expects a negative reaction from investors.

The bank's target price is HK$4.6 and has a "sell" rating.

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