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2009-1-9 12:46:00 p.m. HKT, XFNA
BROKER CALL -Air China price target cut 11 pct on fuel hedging loss fears - Citi
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| BEIJING (XFN-ASIA) - Citigroup said it has slashed its price target on Air China by 11 pct to 1.15 hkd on concerns over fuel hedging losses after Cathay Pacific warned of a 7.6 bln hkd loss from fuel contracts.
Air China owns 17.5 pct of Cathay and Citigroup said the Chinese flag carrier's fuel hedging loss may surge to 5 bln yuan.
The brokerage said the combined hit on Air China's book value could be as much as 22 pct.
It said Air China could incur a loss of 7.7 bln yuan for 2008, significantly higher than consensus estimates of a 2 bln yuan deficit.
Air China's Hong Kong-listed shares closed the morning down 2.97 pct at 2.29 hkd.
Citigroup has a "sell" rating on the company.
(1 usd = 7.8 hkd; 6.84 yuan)
will.davies@afxasia.com |
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