China Airlines (2610 TT, NT$22.00)- Cargo growth to drive performance recovery

Research evidence excerpt

China Airlines (2610 TT, NT$22.00)- Cargo growth to drive performance recovery

YoY. Looking ahead, driven by the AI industry boosting demand for electronic product

transportation, and given that AI electronic products are large and heavy, this is favorable

Source: CMoney for air cargo operators. With rising air cargo demand for electronics, FY26 cargo sales are

expected to show 20% growth.

What's changed

New Old %

Rating Buy Neutral Aviation fuel prices have been declining recently, easing cost pressure in 2H26

Target price 26 20.4 27 After the outbreak of the US-Iran war in the Middle East in March, aviation fuel prices

BVPS Estimate 17.5 17 3 surged rapidly, pushing average prices to US$125.4 and US$159.3 in 1Q26 and 2Q26,

Target PB (x) 1.5 1.2 respectively, compared to the 2025 average of US$86.4, representing a significant

increase. However, given the recent 60-day ceasefire agreement between the US andFinancial summary Year-end: Dec 31

NT$mn FY25 FY26F FY27F Iran, aviation fuel prices have dropped from US$160 to the US$110-115 range. The recent

Net sales 209,139 243,522 246,449 decline in aviation fuel prices will help CAL ease cost pressure in 2H26.

YoY growth (%) 2.6 16.4 1.2

Op profit 20,836 15,345 17,217

YoY growth (%) 14.5 -26.4 12.2 FY26 EPS forecast of NT$1.77, down 26.0% YoY

Net profit 14,700 10,876 12,481 Looking ahead to FY26, driven by cargo growth, estimated sales are NT$243.52bn, up

YoY growth (%) 2.2 -26.0 14.8

16.4% YoY. For GM, due to rising aviation fuel prices, GM is expected to decrease from

EPS (NT$) 2.42 1.77 2.03

DPS (NT$) 0.8 0.7 0.8 17.8% in FY25 to 13.9%. In terms of profitability, we estimate net profit of NT$10.87bn,

PE (x) 9.1 12.4 10.8 down 26.0% YoY, with EPS of NT$1.77 (the original estimate was NT$1.51). The impact of