Cathay Pacific investors ride ‘full recovery’ in US$3.1 billion post-pandemic stock rebound as HSBC, Credit Suisse predict more upside
- While no longer a Hang Seng Index member, the stock’s advance over the past 12 months has outpaced all bar one newcomer, Orient Overseas
- Analysts continue to be bullish as brokerages raised their price targets, while Hong Kong waits to collect its bailout dividends
The carrier’s stock has steadily climbed 34 per cent this year in Hong Kong, including a 0.9 per cent rise to HK$8.60 on Wednesday, the highest level since March 2020. The rebound has helped recoup HK$24.7 billion (US$3.1 billion) of market capitalisation it lost since the initial Covid-19 outbreak in Wuhan. Analysts now see another 11.3 per cent upside over the next year.
Over the past 12 months, Cathay Pacific has risen 39 per cent to rank among the top three among airline stocks in Asia-Pacific, according to Bloomberg data, behind only its major shareholder Air China and Eva Air of Taiwan. Singapore Airlines gained 5.9 per cent while Qantas added 3.1 per cent, below the peer-average of 7.3 per cent.
“We are pretty sure that Cathay turned profitable in July,” Parash Jain, head of Asia transport research at HSBC, said in a report published on Monday. “With the news of the quarantine relaxation, we see further momentum for profitability in 2H22 as it could likely reach its capacity targets much earlier on improving travel sentiment.”
