In major news on Hong Kong stocks, Cathay Pacific Airways Limited (HK:0293) emerged victorious over three years of COVID-led losses, reporting a record annual profit in its 2023 results. The airline achieved a net profit of HK$9.8 billion for the year, marking a significant turnaround from major losses, including HK$6.6 billion in 2022. After the announcement, Cathay Pacific shares surged by nearly 5.8% in today’s trading session, reaching their highest level in four years.
Cathay Pacific is Hong Kong’s premier airline, offering flights to more than 200 destinations across the globe.
Robust Travel Demand Fuels Success
Cathay Pacific’s revenue grew by 85% to HK$94.5 billion in 2023, compared to last year. The growth was driven by a surge in travel demand following the lifting of COVID-related restrictions in Hong Kong and mainland China in early 2023. The company carried a total of 18 million passengers in 2023, resulting in a 309% jump in its passenger revenue.
Cathay Pacific aims to achieve 80% of its pre-pandemic passenger flights by the second quarter of this year and 100% by the first quarter of 2025, which is three months later than its previously announced target. Moreover, the airline is targeting to increase its workforce by approximately 20%, which amounts to 5,000 people in 2024.
Analyst Jason Sum from DBS called the results “remarkable.” However, the analyst remains cautious about the decline in passenger revenue per mile due to increased competition, which could potentially hinder higher passenger traffic in 2024. Sum expects Cathay’s passenger capacity may hit 90% to 95% of pre-pandemic levels by year-end, anticipating a complete recovery in the first half of 2025.
What is the Share Price Forecast for Cathay Pacific?
On TipRanks, 0293 stock carries a Strong Buy consensus rating, backed by Buy recommendations from three analysts. The Cathay Pacific share price target of HK$10.87 implies an upside of 25.2% from the current level.
