HSBC Research initiates a "Buy" rating on TRAVELSKY TECH with a target price of 12.8 yuan

HSBC Research published a report stating that the stable growth in passenger volume of China Civil Aviation Information Network (00696.HK) should help strengthen operational leverage and support an increase in the dividend payout ratio to drive valuation. The bank has initiated a "Buy" rating with a target price of HKD 12.8, believing that the stock is a low beta income investment target in the Chinese aviation tourism sector.

The bank predicts that driven by growth in passenger volume and limited increases in average selling price, China Civil Aviation Information Network's revenue will expand at a compound annual growth rate of 3.9% from 2024 to 2027. With the normalization of operating expenses, it is estimated that the company's EBIT will grow faster at a compound annual growth rate of 9.4%. Additionally, it forecasts a compound annual growth rate of net profit reaching 8%, with the dividend payout ratio expected to rise from 34% in 2024 to an estimated 45% in 2027, implying a current dividend yield of approximately 4%