Cathay Pacific (0293.HK) edged up its target price to HK $8.60 after losing less than expected last year

2022-07-06 0 By

Cathay Pacific (0293.HK) yesterday forecast a loss of HK $5.6 billion to HK $6.1 billion attributable to consolidated shareholders for the year ending 2021, compared with a LOSS of HK $21.6 billion a year earlier.Furey published a research note that Cathay’s profit surprise in the second half of 2021 led to a smaller than expected full-year loss, but this was offset by lower capacity and higher cash burn in the New Year, which also hampered a freight driven recovery, with passenger traffic expected to recover later in the second half of 2022.The bank kept its “buy” call on Cathay on easing restrictions and ample liquidity, but said the stock may not outperform the market until the epidemic abates in Hong Kong, slightly raising its target price by 2.4 percent to HK $8.6 from HK $8.40.Cathay Pacific’s management expects monthly operating cash expenditure of HK $1 billion to HK $1.5 billion from February onwards, slightly higher than about HK $1.2 billion at the end of 2021, as revenue continues to come under pressure due to tightening crew quarantine requirements, the report said.Freight and passenger capacity, which had recovered to 67 percent and 11 percent of pre-pandemic levels in December, are now down to 20 percent and 2 percent, respectively, suggesting a weak start to the New Year.