BNP broadly downgrades China Southern Airlines 01-03 profit forecasts

After China Eastern Airlines Corporation (0670) released profit warnings yesterday, BNP pointed out in its report released today that as the operation cost of China Southern Airlines increased, it downgraded the profit forecasts of the company in 2001, 2002 and 2003 by 36%, 31% and 17% respectively to RMB424 mln, RMB684 mln and RMB1.176 bln. BNP said although the profit of the company in the first-half of the year decreased vs the same period of last year, it was still better than that of the second-half of 2000. BNP forecasted the operation proceeds of China Southern Airlines in the first-half of this year would drop 9% vs the same period of last year, which was mainly due to the rise of the fuel oil cost. BNP reiterated the rating of China Southern Airlines to be ˇ§lead the marketˇ¨ and target price to be RMB3.3.

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