According to a research report, DBS noted that while the 2026 fiscal year is expected to remain challenging for Chinese airlines, the recent significant correction in sector share prices has largely priced in the market's pessimistic outlook for the industry's near-term prospects.
The bank forecasts that CHINA EAST AIR (00670) will still record a loss this year, although current valuations appear to reflect most of the downside risks.
It stated that while current sector valuations seem relatively fair, the possibility of further share price declines cannot be ruled out if the operating environment deteriorates significantly.
The bank has upgraded its rating on the airline to 'Hold', while maintaining its target price at HK$2.9.
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