China Southern Airlines Co Ltd (CHKIF)

Price$0.4197Cached quoteAs of 2026-09-05 04:36 UTC

AI: Fair-priced

Price checkOTC trading is thin and stale, so valuation should lean on fundamentals and the Hong Kong cross-listing.

SEC EDGAR identifies China Southern Airlines Company Limited as CHKIF on OTC, while HKEX confirms its H shares trade as 01055 in Hong Kong. The latest CHKIF close I could verify was dated August 25, so the OTC quote is not a fresh, liquid price signal. The actively traded Hong Kong line remained active in September. For this reason, I treat the OTC price as context rather than precision and put more weight on the latest filings, balance sheet, and cross-listed market valuation.

Big pictureThe valuation looks balanced between a depressed recovery price and still-fragile earnings, leverage, and dilution risk.

Market data around early September put the H-share line at about 1.4 times book value and 0.3 times sales. Those look modest on sales, but book equity is thin relative to debt and profitability is unstable. H1 equity attributable to shareholders fell 15%, and the stock remains a cyclical recovery bet rather than a steady compounder. Because the depressed valuation already reflects much of the fuel shock but not all dilution and capital-spending risk, Fair-priced fits better than a strong bargain call.

Business strengthScale, international growth, cargo, and positive operating cash provide resilience, but fuel overwhelms margins quickly.

Scale is genuine: the group operated 973 aircraft at June end, and international passenger revenue rose 27.5% while cargo and mail revenue rose 18.7%. CSA Logistics earned RMB1.9 billion in H1, providing a useful profit cushion. Day-to-day operations generated RMB10.45 billion of cash, even as the parent posted a RMB3.70 billion net loss. Operating cash flow means cash produced by the business before investing and financing; it is positive, but currently insufficient to cover heavy fleet investment.

What could change the storyFuel normalization and equity funding could repair returns; persistent costs, weak fares, or dilution would undermine them.

At June end, borrowings were RMB150.5 billion and current liabilities exceeded current assets by RMB118.1 billion, although unused committed credit lines were RMB412.6 billion. The proposed A-share raise can bring in up to RMB15 billion and reduce debt pressure, but up to 5.44 billion new shares would dilute existing owners. Bull case: average fuel prices fall 10%, which company sensitivity says would cut six-month operating expense by about RMB3.49 billion. Bear case: the opposite fuel move, weak domestic fares, and continued heavy aircraft spending.

AI: News

Equity raise clears CSRCChina’s securities regulator approved registration for the planned A-share issuance, moving the funding plan closer to completion.

On September 8, HKEX posted China Southern’s announcement that the CSRC approved the registration application for the issuance to specific entities. The plan allows up to RMB15 billion of proceeds for aircraft purchases and general working capital. The interim report said no new shares had been issued as of August 28. Completion would strengthen funding capacity, but issuing up to 5.44 billion A shares could materially dilute ownership on a per-share basis.

Half-year loss widensRevenue grew, but surging fuel costs pushed China Southern to a much larger first-half loss.

On August 28, the company reported H1 operating revenue of RMB94.68 billion, up 9.7%, while net loss attributable to shareholders widened to RMB3.70 billion. Operating expenses rose 17%, and jet fuel costs jumped to RMB34.89 billion from RMB25.33 billion a year earlier. Operating cash flow remained positive at RMB10.45 billion, but investing cash outflow climbed to RMB15.85 billion, showing that fleet spending is absorbing more cash than routine operations currently generate.

July traffic improvesJuly passenger traffic outpaced capacity growth, lifting load factor despite softer international seat utilization.

On August 14, China Southern said July passenger traffic rose 5.25% year over year while passenger capacity increased 4.23%. Overall passenger load factor improved by 0.82 percentage points to 85.20%, meaning a larger share of available seats was filled. International traffic grew 8.18%, although international load factor declined. The update supports demand resilience after the weak first-half profit outcome, but it does not remove the pressure from fuel costs and pricing competition.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
Revenue	¥182.26B	¥174.22B	¥159.93B	¥87.06B	¥101.64B	¥92.56B	¥154.32B	¥143.62B	¥127.81B	¥114.98B	¥111.65B
Research & development	¥607.0M	¥544.0M	¥511.0M	¥389.0M	—	—	—	—	—	—	—
Operating expenses	¥9.66B	¥9.09B	¥7.67B	¥4.07B	—	—	—	—	—	—	—
Operating income	¥8.82B	¥5.56B	¥4.68B	−¥22.54B	−¥9.93B	−¥11.86B	¥10.84B	¥8.82B	¥9.16B	¥12.61B	¥13.44B
Operating margin	4.84%	3.19%	2.92%	−25.89%	−9.77%	−12.82%	7.02%	6.14%	7.16%	10.97%	12.04%
EBITDA	¥41.46B	¥35.58B	¥31.29B	¥1.72B	¥14.31B	¥12.73B	¥35.46B	¥23.13B	¥22.32B	¥25.23B	¥25.28B
EBITDA margin	22.75%	20.42%	19.57%	1.98%	14.08%	13.75%	22.98%	16.10%	17.46%	21.94%	22.64%
Net income	¥857.0M	−¥1.70B	−¥4.21B	−¥33.72B	−¥11.02B	−¥11.83B	¥3.08B	¥3.36B	¥6.90B	¥5.90B	¥4.82B
Net profit margin	0.47%	−0.97%	−2.63%	−38.73%	−10.84%	−12.78%	2.00%	2.34%	5.40%	5.13%	4.32%
Basic EPSper basic share	CN¥0.05	-CN¥0.09	-CN¥0.23	-CN¥1.90	—	—	—	—	—	—	—
Diluted EPSper diluted share	CN¥0.05	-CN¥0.09	-CN¥0.23	-CN¥1.90	—	—	—	—	—	—	—