Morgan Stanley: The recovery of China's aviation industry is imminent. Upgrades rating of three major Chinese state-owned airlines.

Morgan Stanley released a research report stating that for the Chinese aviation sector, it is predicted that with limited capacity and an increase in airline travel penetration rate, Chinese airlines' profits will enter a multi-year upward cycle. Due to improved demand prospects, it is expected that the aviation industry will be one of the first industries in China to escape deflationary pressure by 2025. Morgan Stanley stated that with recovery imminent, Chinese airlines have a longer time frame than global peers to achieve stronger profit growth. They have raised the rating and target price for multiple Chinese airlines, with profit forecasts for China Southern Airlines (01055), China Eastern Airlines (00670), and Air China Limited (00753) all being increased by an average of 112% for 2025 and 62% for 2026. The H-share rating has been upgraded to "hold". Cathay Pacific Airways (00293) has been given a "synchronized with the market" rating due to limited upside potential.