Daily Investment Strategy
Daily focus：Cathay Pacific Group（0293）
Reported robust financial performance for the full year 2024, with the negative impacts of the pandemic having dissipated. Annual revenue reached HK$104.3bn, representing a 10.5% yoy increase, while profit attributable to shareholders amounted to HK$9.89bn, up 1.0% from 2023. The Group declared a full-year dividend of HK$0.69 per share, a substantial 60.5% increase compared to the previous year. Looking ahead to 2025, Cathay Pacific is poised for further growth driven by several favorable factors. The International Air Transport Association (IATA) projects that Asia-Pacific airlines' profits will rise to US$3.26bn in 2025, up from US$3.2bn in 2024. Industry capacity growth is expected to be constrained due to aircraft supply limitations, which should help maintain higher yields and revenues. Additionally, Cathay plans to initiate negotiations for more long-haul wide-body aircraft orders in 2025, preparing to update its Boeing 777 fleet. This strategic move is anticipated to enhance long-term operational efficiency and optimize the airline's cost structure.
US Feb inflation figure below than consensus, rising rate cut expectation
The February 2025 CPI data showed inflation cooling to 2.8% yoy, below the expected 2.9% and January’s 3.0%. Core CPI eased to 3.1%, reaching its lowest level since April 2021. The monthly increase was 0.3% for both headline and core measures. Key components showing moderation included core goods and services, though used car prices increased due to wildfire impacts, and airfare remained elevated from supply constraints. Following this better-than-expected report, market expectations for Fed rate cuts strengthened significantly, with the CME FedWatch Tool showing the probability of a June cut surging to 77.1% from previous levels around 50-60%. The likelihood of a May cut increased to 34%, up from about 20% before the report, while March remained unlikely at just 3%. This marks a substantial improvement from February, when hot January inflation data had reduced the June cut probability to just 34.8%, reflecting growing confidence that inflation is finally approaching the Fed’s 2% target.
Hong Kong Stock Connect recorded a net inflow of HK$26.21bn on Wednesday, of which Tracker Fund of Hong Kong (2800) recorded the largest net inflow of HK$8.28bn, followed by Xiaomi (1810). Xpeng Motors (9868) recorded a net outflow of HK$260mn.
Cheung Cho Shing, Joseph 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/ACQ030/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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