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CATHAY PAC AIR(293)
Analysis¡G
Cathay Pacific and HK Express continue to launch new routes and add more destinations. Currently, the Group¡¦s passenger flights serve over 100 destinations worldwide. The Group recently announced that it will launch direct passenger services between Hong Kong and Changsha starting November 4, 2025, bringing the number of mainland China destinations to 24. Cathay Pacific will also increase frequencies on Beijing, Guangzhou, Chengdu, and Shanghai routes this winter, operating over 330 round-trip flights per week between Hong Kong and mainland China. In the Americas, Cathay Pacific provides regular passenger services to 8 destinations. In April this year, it launched its first direct flights to Dallas/Fort Worth International Airport, further expanding its network in the important North American market. In Southeast Asia and Oceania, Cathay Pacific serves 20 destinations with regular passenger flights and will resume services to Adelaide in November, offering three weekly winter seasonal flights. In Europe, Cathay Pacific serves 12 destinations with regular passenger flights. The Group continues to add routes to strengthen its European network, such as resuming Rome services in June with summer seasonal flights and launching direct passenger flights to Munich for the first time. In South Asia, the Middle East, and Africa, Cathay Pacific serves 11 destinations with regular passenger flights. In March this year, it resumed direct flights between Hong Kong and Hyderabad, further strengthening its India network.For cargo, in addition to utilizing belly cargo space on Cathay Pacific passenger flights, the Group operates freighter services to 12 destinations in the Americas, 9 in Southeast Asia and Oceania, 9 in North Asia, 5 in Europe, and 6 in South Asia, the Middle East, and Africa.
This year, Cathay Pacific¡¦s passenger traffic has continued to grow strongly. In the first nine months, total passengers increased by 26.8% year-on-year to 20.9961 million; available seat kilometers (ASK) increased by 26.6%; revenue passenger kilometers (RPK) increased by 29.6%; and passenger load factor rose by 1.9 percentage points to 84.9%. For cargo, in the first nine months, cargo volume was 1.2156 million metric tons, up 10.2%; available cargo ton kilometers (AFTK) increased by 8.6%; revenue cargo ton kilometers (CFTK) increased by 6.7%; and cargo load factor fell by 1.1 percentage points to 58.2%.
Following the end of the summer travel peak in September, there was a surge in student travel, particularly with high load factors on flights from Hong Kong to the UK. At the same time, connecting passengers drove a significant recovery in demand for Japan routes last month, with passenger volumes exceeding the same period last year. Additionally, multiple exhibitions in Hong Kong, as well as Milan and Paris Fashion Weeks, drove premium cabin load factors to a record high for the month. Ahead of the National Day holiday, routes from mainland China to Hong Kong and Southeast Asia also recorded steady performance. Looking ahead, with Christmas and New Year holidays approaching, travel demand will continue to grow. The Group will continue to add flights and destinations in the coming months, providing customers with more choices and a broader route network. (I do not hold the above stock)
Strategy¡G
Buy-in Price: $10.90, Target Price: $11.90, Cut Loss Price: $10.40
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SANDS CHINA LTD(1928)
Analysis¡G
Sands China's total net revenue for the third quarter of 2025 increased by 7.5% to $1.9 billion, compared to the third quarter of 2024. Net income for the third quarter of 2025 was $272 million, up from $268 million in the same period of 2024. The Londoner project continued to ramp up, with the completion of its second-phase renovation and the reopening of all 2,405 hotel rooms and suites. The net revenue of the Londoner project in the third quarter of 2025 increased by 49.1% year-on-year, positioning it as a major future revenue driver. The hotel occupancy rate reached 96.4%, with robust demand in the premium segment supporting resilient performance. Parent company LVS increased its stake to 74.9% and expanded its investments in Macau, leveraging its strong cash flow to support project expansion. As of 23:00 on October 2, 2025, Macau had welcomed a cumulative total of 30 million inbound tourists, reaching this milestone 40 days earlier than the previous year and on par with the same period in 2019, reflecting Macau¡¦s sustained strong tourism recovery. As a leading enterprise in Macau¡¦s gaming industry, Sands China demonstrates short-term resilience driven by the strong performance of The Londoner project and its strategic focus on the premium mass segment. In the long term, the company is well-positioned to benefit from Macau¡¦s tourism recovery and the expansion of its non-gaming businesses.
Strategy¡G
Buy-in Price: $19.23, Target Price: $21.20, Cut Loss Price: $18.40
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Minth Group (425.HK) - Battery Box Becomes the Largest Business Segment
Company ProfileMinth Group is a world-renowned supplier engaged in the design, manufacturing and sales of automotive interior and exterior trim and body structure parts. The domestic market share of its core products exceeds 30%. The company has production bases in China, the United States, Mexico, Thailand, Germany, Serbia and other countries, and its customers cover major vehicle companies in the market. Based on a variety of new materials and surface treatment technologies, in recent years the company has developed new electrified and smart product lines such as aluminum power battery boxes and smart front faces, forming a series of competitive terminal products. Investment SummaryStrong Profit Growth Maintained in H1 2025, Net Profit Up Nearly 20%
Minth Group recorded revenue of RMB12.287 billion (RMB, the same below) in H1 2025, up 10.8% yoy; net profit attributable to the parent company reached RMB1.277 billion, equivalent to an increase of 19.5% yoy. The main drivers behind the profit growth include: 1) continued ramp-up of orders for NEV components such as battery boxes, leading to higher capacity utilisation; 2) incremental earnings contribution from capacity ramp-up at overseas production bases; 3) decline in unit transportation costs and favourable exchange rates. Meanwhile, the Company continued to advance its localisation strategy and implement effective cost control measures, resulting in lower expense ratios.
By region, domestic revenue was RMB4.31 billion, down 4.9% yoy, mainly due to the decline in market share of joint venture brands in China. International business remained strong, with revenue up 21.6% yoy to RMB7.98 billion, primarily driven by rapid growth in battery box and structural component businesses in the European market, as well as stable contributions from traditional exterior parts in international markets. The proportion of international business in total revenue rose by 5.2 ppts from 59.7% at the end of 2024 to 64.9%. The localisation strategy in North America, Europe and other regions has effectively reduced tariffs and geopolitical risks, while enhancing competitiveness in local markets. Battery Box Becomes the Largest Business Segment
In H1, the Company's revenue from plastic parts, metal and trims, battery boxes, and aluminium parts reached RMB2.87/2.66/3.58/2.47 billion respectively, up 0.9%/4.7%/49.8%/4.1% yoy. Their respective shares of total revenue changed by -2.3/-1.3/+7.6/-1.3 ppts yoy, to 23.3%/21.6%/29.2%/20.1%.
During the review period, the Company achieved breakthroughs in its battery box and body chassis structure businesses, with a more balanced customer mix: it broke into the structural component business for Toyota Europe, and secured chassis structure orders from multiple Chinese clients such as Great Wall and Geely; entered the battery box business of Chery for the first time and secured repeat orders from BYD; made its first breakthrough in battery box structural parts for General Motors; and continued to expand its battery box business with Stellantis and Volkswagen. In the area of smart interior and exterior parts, the Company achieved breakthroughs in bumper assembly business with Ford North America and Renault, while continuing to secure orders from clients such as Toyota, Hyundai-Kia, Changan, and General Motors. Profitability Continued to Improve SteadilyDuring the period, gross margin was approximately 28.3%, down 0.2 ppts yoy, mainly due to the rising contribution from the battery box business. The gross margins of the four major business segments were 26.1%, 28.1%, 23.0%, 32.6%, representing yoy changes of +2.0, +1.6, +2.4, -2.4 ppts, respectively. Among them, the battery box segment achieved a gross margin of 23%, moving closer to the 25% target. During the period, selling, administration and R&D expense ratios declined by 0.6, 0.1, and 0.5 ppts yoy respectively, lifting net profit margin by 0.8 ppts to 10.4%, indicating an improvement in the Company's profitability.
Operating cash flow rose by RMB 510 million yoy to RMB2.24 billion in H1 2025, reflecting sound cash flow conditions, which provide a solid basis for dividend payments and share buybacks. Capital expenditure stood at RMB902 million, down 17.5% yoy, as the Company has passed its peak investment phase and will focus on equipment upgrades and flexible transformation going forward. In H2, as several new overseas production lines continue to ramp up, overall gross margin is expected to see a slight improvement mom. New Businesses and Emerging Segments Gearing UpThe Company is actively exploring new business segments and has made forward-looking deployments in areas such as eVTOL (electric vertical take-off and landing aircraft), wireless charging for electric vehicles, and bionic robots---including core components such as electronic skin, smart masks, integrated joints, bodies, and rotors. During the period, the Company partnered with leading enterprises including EHang and Zhiyuan Robotics. Some products have completed small-batch sample deliveries to multiple customers, and some have already secured mass production orders, with revenue contribution expected to begin in 2026/2027. With the rapid development of robotaxis and autonomous driving, the wireless charging industry is projected to experience explosive growth in 2026. At the same time, leveraging its battery box technology, the Company is also focusing on the development and implementation of AI liquid-cooling system-related products, aiming to capture opportunities in the rapidly growing artificial intelligence market. ValuationThe company maintains stable overall operations, with continuous improvement in profitability, demonstrating strong risk resilience and growth adaptability. Meanwhile, the cultivation of new business areas and the expansion of new ventures are expected to foster a second growth curve, driving the company's sustainable development in the medium to long term.
We slightly revised the expected EPS for 2025/2026/2027 to 2.35/2.77/3.25 (from 2.43/2.89/3.30) yuan for the under expected GM.
We believe that it is reasonable to give the Company a valuation of 12.7/10.6/9.0 x P/E and 1.5/1.4/1.2x P/B for 2025/2026/2027, equivalent to target price of HK$ 32.6 and Accumulate rating. P/E Band
Source: Wind, Phillip Securities Hong Kong Research Financials
(Closing price as at 17 October 2025) Click here to download PDF version...
| Recommendation on 24-10-2025 | | Recommendation | Accumulate (Downgrade) | | Price on Recommendation Date | $ 29.480 | | Suggested purchase price | N/A | | Target Price | $ 32.600 |
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