Morgan Stanley: Maintains CATHAY PAC AIR (00293) "Overweight" rating, target price HK$16.9

Morgan Stanley released a research report stating that CATHAY PAC AIR (00293)'s August passenger business normalized amid a high base, while its cargo business remained resilient; the bank believes that elevated aviation fuel prices remain the main headwind to Cathay's short-term profitability. The bank maintains its "Overweight" rating on Cathay with a target price of HK$16.9. In August this year, revenue passenger kilometers (RPK) rose 4% year-on-year (previous value: up 6.6%), available seat kilometers rose 3.4% year-on-year (previous value: up 5%), and the passenger load factor remained at a solid level of 87.2%, up 0.5 percentage points year-on-year; management said cargo demand growth strengthened, supported by demand from semiconductors, pharmaceuticals, and inventory restocking. Looking ahead, management expects passenger demand to slow seasonally in September and improve around the National Day Golden Week; cargo demand is expected to be supported by high-tech product launches and the traditional peak season.