HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cathay-pacific-airways-ltd" target="_blank" data-smartkarma-citation="entities:243:1" rel="noopener">Cathay Pacific Airways (293 HK)</a>'s Jan figures suggest a good start, as passenger traffic grew 12.3% despite a high base in the last year.  </li>
<li>The market consensus forecast of 8% profit decline for FY26 is too conservative. Even on such a forecast, it still trades on an undemanding 9.3x PER and 4.8% yield.</li>
<li>CX is expected to have an average FY25-27F ROE of 15.9%, the highest level in the last 15 years. Hence, its P/B of 1.35x is inexpensive.</li>
</ul>



Cathay Pacific Airways (293 HK)'s Jan figures suggest a good start, as passenger traffic grew 12.3% despite a high base in the last year.  
The market consensus forecast of 8% profit decline for FY26 is too conservative. Even on such a forecast, it still trades on an undemanding 9.3x PER and 4.8% yield.
CX is expected to have an average FY25-27F ROE of 15.9%, the highest level in the last 15 years. Hence, its P/B of 1.35x is inexpensive.


Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

<ul>
<li>Legal border crossings in/out of the US in December continued to weaken, including by air</li>
<li>By region, Northern crossings remain weakest; inbound West air crossings still up Y/Y</li>
<li>Numbers suggest tourism activity from Asian sources remains relatively resilient</li>
</ul>


Legal border crossings in/out of the US in December continued to weaken, including by air
By region, Northern crossings remain weakest; inbound West air crossings still up Y/Y
Numbers suggest tourism activity from Asian sources remains relatively resilient


December 2025 USCBP Data Shows US Border Crossing Activity Continued to Decline, Especially in North

China Southern Airlines / Equity Bottom-Up

<ul>
<li>After an upturn in October-November, pace of outbound air travel softened in December</li>
<li>But domestic air activity continued to strengthen in December -- a positive surprise</li>
<li>Continued strength of outbound air travel demand could imply emphasis on frugality</li>
</ul>


After an upturn in October-November, pace of outbound air travel softened in December
But domestic air activity continued to strengthen in December -- a positive surprise
Continued strength of outbound air travel demand could imply emphasis on frugality


Monthly Chinese Tourism Tracker | December Outbound Pace Softer, but Domestic Activity Strengthened

<ul>
<li>Overall US border crossings fell in November 2025, but crossings by air were up Y/Y (again)</li>
<li>Northern crossings fell sharply, down -14% Y/Y; local businesses in US, Canada hit hardest</li>
<li>But crossings at Western air gateways surged, which could imply Asian tourism reslience</li>
</ul>


Overall US border crossings fell in November 2025, but crossings by air were up Y/Y (again)
Northern crossings fell sharply, down -14% Y/Y; local businesses in US, Canada hit hardest
But crossings at Western air gateways surged, which could imply Asian tourism reslience


US Customs & Border Protection Data: Northern Crossings Down, Western (Asian?) Air Crossings Firmer

<ul>
<li>Despite a few pockets of improved demand, key Transpacific trade remains weak</li>
<li>Most carriers reported low (48% - 68%) but stable cargo load factors in August</li>
<li>For carriers, still lots of empty space to sell; macro view shows no "snap-back"</li>
</ul>


Despite a few pockets of improved demand, key Transpacific trade remains weak
Most carriers reported low (48% - 68%) but stable cargo load factors in August
For carriers, still lots of empty space to sell; macro view shows no "snap-back"


Monthly Air Cargo Tracker | August Shows Pockets of Growth | But LF, Pricing Both Still Very Weak

Japan

ANA Holdings Inc provides a variety of air transportation-related services. The Company offers scheduled & unscheduled air passenger services and air courier services. ANA sells aircraft parts and provides travel arrangement & reservation services as well.

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Ana Holdings (9202 JP)

Cathay Pacific (293 HK): A Good Start

CX's FY25 net profit of HK$10.8bn (+9.5% YoY) has beaten market expectations widely, as it is 19.1% ahead of the consensus forecast. With a second...

Osbert Tang, CFA

December 2025 USCBP Data Shows US Border Crossing Activity Continued to Decline, Especially in North

December data from US Customs and Border Protection show reduced border crossings in and out of the US. One bright spot is air crossings in the...

Tracking Traffic

Monthly Chinese Tourism Tracker | December Outbound Pace Softer, but Domestic Activity Strengthened

The surprisingly strong upturn in Chinese outbound in October-November did not continue in December, unfortunately. But domestic air travel...

Tracking Traffic

US Customs & Border Protection Data: Northern Crossings Down, Western (Asian?) Air Crossings Firmer

US border crossing data from November 2025 shows weakness in travel activity in most regions and by most travel modes. But air crossings in the...

Tracking Traffic

Monthly Air Cargo Tracker | August Shows Pockets of Growth | But LF, Pricing Both Still Very Weak

August air cargo data from a range of carriers and cargo gateways around the Pacific Rim show uneven demand, but still-low utilization and weak...

Tracking Traffic

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