Yee Rating Releases First Rating Report for China Southern Airlines

On August 17, Yicai's "Yipin Rating" released its first rating report for China Southern Airlines. China Southern Airlines has shown a good performance trend in profitability, and "Yipin Rating" has given it a rating of 3.5 stars. The dynamic valuation model and DDM valuation model from "Yipin Rating" indicate that China Southern Airlines' current market value is below its intrinsic value. China Southern Airlines is a leading air transport service provider in China by fleet size. The company is strategically positioned in two major hubs, Beijing and Guangzhou, establishing a mature and well-developed scaled route network. Its number of routes, flight frequency, and domestic market share rank among the top in the industry. Relying on this dual-hub network operation system, China Southern Airlines has built a significant competitive moat. The airline industry is currently in a low point of its profitability cycle, affected by high fuel prices and weak demand, leading to a continued decline in domestic ticket prices. There are concerns in the market regarding China Southern Airlines' future profitability. However, "Yipin Rating" believes that the pressure on profitability is a short-term phenomenon, and as the supply and demand structure in the airline industry gradually improves, the company's profitability is expected to recover significantly. Currently, the markets valuation of China Southern Airlines is considered low. The full text of the first rating report on China Southern Airlines can be viewed on the Yicai app and website.