Equity Long-Short

Mo Aziz

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/japan-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1184:1" rel="noopener">Japan Airlines (9201 JP)</a> (JAL) is making a positive recovery on strong domestic and international demand</li>
<li>Weak JPY is a big headwind and so is its 40% fuel hedge cover locked in at higher than-market price. These factors should reverse and unwind next year </li>
<li>Target price JPY3,150 based on 1.65x FY24 P/BV - one standard deviation above its mean. Borderline attractive with 12% UPSIDE, and 2.3% dividend yield  </li>
</ul>



Japan Airlines (9201 JP) (JAL) is making a positive recovery on strong domestic and international demand
Weak JPY is a big headwind and so is its 40% fuel hedge cover locked in at higher than-market price. These factors should reverse and unwind next year 
Target price JPY3,150 based on 1.65x FY24 P/BV - one standard deviation above its mean. Borderline attractive with 12% UPSIDE, and 2.3% dividend yield  


Japan Airlines (9201 JP, BUY, TP: JPY3150): Slow, Steady, Stable Recovery

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-airlines-ltd" target="_blank" data-smartkarma-citation="entities:4591:1" rel="noopener">China Airlines (2610 TT)</a> will deliver record profit in 2023 on strong passenger and rising cargo rates</li>
<li>Beyond 2023, hard to forecast due to high exposure (~30%) to volatile cargo, and it lacks brand recognition and customer loyalty evidenced by its weaker yields to local rival   </li>
<li>Target price of TWD23 based on 1.71x FY2024 P/BV ratio - one SD above mean. Limited 6% UPSIDE, with 3,9% dividend yield. Prefer <a href="https://www.smartkarma.com/entities/eva-airways-corp" target="_blank" data-smartkarma-citation="entities:20645:1" rel="noopener">Eva Airways (2618 TT)</a> </li>
</ul>



China Airlines (2610 TT) will deliver record profit in 2023 on strong passenger and rising cargo rates
Beyond 2023, hard to forecast due to high exposure (~30%) to volatile cargo, and it lacks brand recognition and customer loyalty evidenced by its weaker yields to local rival   
Target price of TWD23 based on 1.71x FY2024 P/BV ratio - one SD above mean. Limited 6% UPSIDE, with 3,9% dividend yield. Prefer Eva Airways (2618 TT) 


China Airlines (2610 TT, NEUTRAL, TP:TWD 23.00): Superb 2023 Masks Upcoming Challenges

<ul>
<li>
<a href="https://www.smartkarma.com/entities/eva-airways-corp" target="_blank" data-smartkarma-citation="entities:20645:1" rel="noopener">Eva Airways (2618 TT)</a> (EVA) is enjoying the perfect tailwind of strong demand from both inbound and outbound, capacity deficit, a resurgence in corporate travel, and rising cargo rates   </li>
<li>Consensus believes FY2023 will be peak earnings as 2024 capacity rollout will balance the demand-supply, but our observations suggest things will likely remain the same until the end of 1H24</li>
<li>Target price of TWD34.90 based on 13.4x FY2024 PE ratio - its long-term mean. Borderline attractive with a modest 11% UPSIDE, but 5.9% dividend yield is a sweetener  </li>
</ul>



Eva Airways (2618 TT) (EVA) is enjoying the perfect tailwind of strong demand from both inbound and outbound, capacity deficit, a resurgence in corporate travel, and rising cargo rates   
Consensus believes FY2023 will be peak earnings as 2024 capacity rollout will balance the demand-supply, but our observations suggest things will likely remain the same until the end of 1H24
Target price of TWD34.90 based on 13.4x FY2024 PE ratio - its long-term mean. Borderline attractive with a modest 11% UPSIDE, but 5.9% dividend yield is a sweetener  


Eva Airways (2618 TT, BUY, TP:TWD34.90) The Best, but Not the Cheapest

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>Taiwanese air cargo rates soared during the pandemic, and remain high today</li>
<li>Taiwan's carriers also benefited from an early recovery in outbound tourism</li>
<li>Investors seem to be pricing in a '24 earnings collapse that probably won't happen</li>
</ul>


Taiwanese air cargo rates soared during the pandemic, and remain high today
Taiwan's carriers also benefited from an early recovery in outbound tourism
Investors seem to be pricing in a '24 earnings collapse that probably won't happen


Thanks to High Cargo Yields & Early Tourism Rebound, EVA & CAL Remain Highly Profitable in H223

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in foreign holdings of TWSE Stocks as of Dec 1st which has an aggregated holding worth USD684.7bn.</li>
<li>We tabulate league table for top changes by value for 1 week, one 4 weeks, 1 year and top stocks held by foreign instutions by dollar value.</li>
<li>We estimate that foreign flows to be inflows of USD1,077mln and highlight foreign changes in TSMC, Mediatek, Umc.</li>
</ul>


We analyzed the changes in foreign holdings of TWSE Stocks as of Dec 1st which has an aggregated holding worth USD684.7bn.
We tabulate league table for top changes by value for 1 week, one 4 weeks, 1 year and top stocks held by foreign instutions by dollar value.
We estimate that foreign flows to be inflows of USD1,077mln and highlight foreign changes in TSMC, Mediatek, Umc.


TWSE Foreign Holding Weekly (Dec 1st): TSMC, Mediatek, Umc

Taiwan

EVA Airways Corp. is an air carrier that transports passengers and cargos. The Company operates primarily in Taiwan and serves international route networks in North America, Asia, Europe, and Australasia.

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Eva Airways (2618 TT)

Japan Airlines (9201 JP, BUY, TP: JPY3150): Slow, Steady, Stable Recovery

Japan Airlines is recovering with steady domestic and international demand despite headwinds from a weak JPY against the USD. the company is...

Mo Aziz

China Airlines (2610 TT, NEUTRAL, TP:TWD 23.00): Superb 2023 Masks Upcoming Challenges

China Airlines will deliver record earnings in 2023 but will struggle thereafter due to a weaker product portfolio against its rivals and high...

Mo Aziz