JP Morgan: Maintains "overweight" rating on CATHAY PAC AIR (00293) with target price raised to HKD 12.3.

J.P. Morgan issued a research report stating that the target price of CATHAY PAC AIR (00293) was raised by 2.5% to HK$12.3 from HK$12. Although the rating was maintained as "overweight," it was removed from the "Positive Catalyst Watch" list. Cathay Pacific held an analyst conference call yesterday (January 9), and the stock price rose by 7.8%, reaching its highest level post-pandemic, with a cumulative increase of 32% over the past 3 years. The bank stated that Cathay's performance is strong, with a forecast of improved financial performance in the second half of 2024 compared to the first half, with a net profit of HK$3.6 billion mainly driven by increased cargo demand, lower fuel prices, and asset disposals. They recently repurchased 68% of convertible bonds, showing confidence in their financial condition. The stock has a price-to-book ratio (P/B) of 1.1 times and a price-to-earnings ratio (P/E) of 7.3 times. J.P. Morgan estimated the EV/EBITDA for Cathay in 2025 to be 4.3 times, slightly higher than the medium-term cycle, but cheaper than global peers, and offering a 5% yield, hence the target price adjustment and extension to June 2026.