Financial News
Written by: Xu Shihao, Deng Huilin, Huang Jie
2020-10-21 11:21
Last update date: 2020-10-21 12:52
Affected by the "new crown epidemic", countries have closed customs, and the aviation industry will not be affected. Cathay Pacific (0293) announced today (21st) a restructuring after recapitalization. The entire group will cut about 8,500 positions, equivalent to The total number of positions in the group is approximately 24%, and the operation of its "Cathay Dragon" brand is also suspended.
The outlook for the industry is unclear, but spurred by the news, the stock price has opened halfway. Investors seem to have confidence in the company's prospects, but how do experts dismantle the situation?
At 11 o'clock this morning, "Hong Kong 01" will discuss with Chen Weicong, director of the research department of Youxin Securities, to analyze whether the company can be reborn after this restructuring.
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Chen Weicong believed in the program that Cathay Pacific’s restructuring plan "must be done."
He pointed out that in the global aviation industry downturn, Cathay Pacific’s capacity has dropped by 90% in recent months. Even next year, it is only expected to recover by 40% to 50%. Although the company has implemented a lot of measures to reduce expenditure, its staff costs have not been restored. Great. After the reorganization, expenditures have decreased. "The burning of money is less, and the market may not need to worry about raising funds or even breaching contracts."
Short-term target price of 6.5 yuan
After the news was announced, Cathay Pacific’s stock price rebounded by half, but Chen Weicong pointed out that since the epidemic has not improved, even if there is a vaccine, its effect is still uncertain, and the Hong Kong government has only established a "tourism bubble" with Singapore for the time being. Many variables.
However, he pointed out that Cathay Pacific’s stock price has plummeted in the past half of the year and its current valuation is low. If investors are interested in short-term speculation, they can consider using the short-term resistance level of 6.5 yuan as the target price.
Restructuring plan is expected to help Cathay Pacific overcome difficulties
As for Everbright Sun Hung Kai Securities, strategist Wu Lixian believes that Cathay Pacific’s layoffs give people a "normal" perception, but believes that the plan can help the company tide over the difficulties. The medium and long-term performance is positive. "Short pain", "the epidemic continues to repeat. Even if there is no epidemic, the aviation industry must return to a normal level. The challenges will continue in the next 3 to 5 years."
He added that Cathay Pacific’s layoffs are not an isolated incident. The global aviation industry is facing difficulties, but Cathay Pacific is not pessimistic in the long term. “The company’s international airline network is always strong and it has government financial support. It has an advantage over other companies.” After the launch of the layoff plan, the stock price rose by half to 6 yuan in the early stage. Wu Lixian believed that the market reaction was positive, but he suggested that long-term investors wait for the flu peak period to pass and make a decision depending on the development of the epidemic.
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