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<Research>UBS: If Oil Prices Rise to USD80/ bbl, 3 CN Airlines May All Lapse into Losses
Recommend 9 Positive 8 Negative 7 |
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The abrupt Mideast conflict has given rise to the upsurge in oil prices, which could cast a material negative impact on the earnings of China's aviation industry in the short term, UBS opined in a report. The broker's sensitivity analysis showed that if oil prices rise to USD70/ bbl, it is expected that the earnings of the three major Chinese airlines in 2026 will be negatively impacted by 40-60%. Coupled with valuations higher than peers, Chinese airlines face downside pressure. The Sell rating was maintained for AIR CHINA (00753.HK) and CHINA EAST AIR (00670.HK). When oil prices reach USD70/ bbl, the broker estimated that the net profit of the three major Chinese airlines in 2026 will subside by 40-60%; if oil prices elevate to USD80/ bbl, all three major airlines may veer into losses. AASTOCKS Financial News Website: www.aastocks.com |
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