Daily Investment Strategy
Recommended Stock：Cathay Pacific（293）
Cathay Pacific carried 1.816 million passengers in September, a yoy increase of 17.8%. Revenue passenger kilometers increased by 18.4% yoy during the month. Looking ahead to the coming months, Cathay Pacific will add more flights and routes to meet the growth in outbound travel demand. The Group remains optimistic about passenger traffic during the Christmas holiday this year and expects it to be better than the same period last year. Additionally, Cathay Pacific's liquidity has improved, with available unrestricted cash amounting to HK$25.4 billion in the first half of the year. After redeeming all remaining preferred shares (previously issued to the Hong Kong SAR government) in July, Cathay declared its first post-pandemic interim dividend at HK$0.20 per share, with a payout ratio of approximately 40%. Management stated that its long-term dividend policy remains unchanged, aiming to distribute 50% of annual profits based on market conditions. Currently, Cathay Pacific has a healthy debt level and has room to fulfill its commitments. Target price: $9.2; Stop- Loss price: $7.3.
China's industrial enterprises' profits fell by 3.5% in the first nine months
According to the National Bureau of Statistics, China's industrial enterprises' profits fell by 3.5% in the first nine months. The official report noted that the monthly profit for September dropped by 27.1% due to a high base effect from last year, 9.3ppts lower compared to August. Despite this, revenue for the first nine months still recorded positive growth, but the operating profit margin has declined for three consecutive months to 5.27%.
On Friday, the Southbound Stock Connect saw a net inflow of HK$9.2 billion. The Tracker Fund of Hong Kong (2800) had the largest inflow of HK$2.19 billion, followed by Alibaba (9988). Meituan (3690) recorded the largest net outflow of HK$530 million, followed by China Mobile (941).
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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