Morgan Stanley: Mainland airline stocks have improved fundamentals, expected to gradually and unevenly improve before the summer peak.

Morgan Stanley released a research report stating that the fundamentals of mainland airline stocks will gradually improve and be volatile before the summer peak. However, market sentiment may be ahead of the fundamentals, as the market is overlooking the long-term impact of supply constraints on airlines. Morgan Stanley mentioned that due to thin profits at present, mainland airline stocks are still cheaply valued. The bank believes that in the next two to three years, there will be significant upside potential in both industry fundamentals and valuations. The bank also pointed out that some investors have a constructive view on the cycle, but caution is required in selecting the timing to enter the market.