China Air Carriers Still a Bargain

CICC has upgraded major Chinese airlines like Air China and China Southern to 'buy' due to a strong economic recovery and increased travel demand. The yuan's strength is also encouraging travel. Despite high valuations, these airlines are considered bargains compared to peers, with China Southern trading at 9 times estimated earnings versus an average of 13 for the Asia Pacific index and 22 for Singapore Airlines.

What is the main reason CICC upgraded major Chinese airlines?

• A merger between Air China and China Southern

• New government regulations

• A strong economic recovery and increased travel demand

• A decline in global oil prices

How has the yuan's performance influenced travel demand?

• It has increased travel demand

• It has had no impact on travel demand

• It has led to more domestic travel

• It has decreased travel demand

What is the valuation level of China Southern compared to the average for the Asia Pacific Airlines index?

• Higher than the average

• Not mentioned in the transcript

• Equal to the average

• Lower than the average

Which airline has a valuation of 22 times estimated earnings?

• China Eastern

• Air China

• China Southern

• Singapore Airlines

What is the significance of the valuation levels of the big three Chinese airlines?

• They are higher than Singapore Airlines

• They are the highest since 2015 but still considered cheap

• They are average compared to global airlines

• They are the lowest in the past decade