600029 China Southern Airlines opened at the daily limit today. The main reasons are:

1. The controlling shareholder China Southern Airlines Group received a capital injection of 3 billion from the state. China Southern Airlines announced on October 26: The company’s controlling shareholder China Southern Airlines Group Corporation has recently received the "Notice of the Ministry of Finance on Issuing the 2008 Central State-owned Capital Operation Budget (Appropriation) of China Southern Airlines Group Corporation" (Caiqi [2008] No. 316) issued by the Ministry of Finance. According to this notice , the Ministry of Finance issued a central state-owned capital operating budget of 3 billion yuan to China Southern Airlines Group in 2008. This allocation was treated as an increase in the national capital of China Southern Airlines Group. The board of directors of China Southern Airlines Co., Ltd. has asked the executive director of China Southern Airlines Co., Ltd. and the controlling shareholder China Southern Airlines Group about this matter. Currently, China Southern Airlines The group is considering injecting this capital into the company, and China Southern Airlines itself is also planning a non-public issuance of shares.

After completing the capital injection, the asset-liability ratios of the two major airlines dropped by about 3 points, and interest expenses were also significantly saved.

2. China Southern Airlines will issue 720 million A and H shares at the same time. China Southern Airlines will issue 720 million A shares to its major shareholder China Southern Airlines Group and China Southern Airlines Group’s overseas wholly-owned subsidiary Nanlong Holdings Co., Ltd. shares and H shares. The issuance price of A shares is 3.16 yuan/share, and the total amount of funds raised is 2.28 billion yuan; the issuance price of H shares is 1 yuan/share. After deducting issuance fees, all will be used to repay the bank loan principal.

3. The plunge in oil prices has released pressure on airline stocks. After hovering around US$60 for a period of time, international crude oil futures finally returned to US$50. On November 11, the price of December light crude oil futures on the New York Mercantile Exchange plummeted by US$3.08 to US$59.33 per barrel, setting a new low in 20 months. This is a real benefit for China Southern Airlines (600029), which has the largest number of aircraft, route network and largest passenger market share in China. The company is one of the three major airlines in my country. It currently has the largest number of aircraft, route network and largest passenger market share in the country. The company has formed a large triangle structure by reorganizing Xinjiang Airlines and Northern Airlines, expanding and improving the network structure. , consolidating the company's advantages in the domestic route network.

4. The joy brought by the Big Three Links The implementation of the Big Three Links has brought a new round of opportunities to the shipping sector. Especially the companies in the Xiamen sector that are engaged in domestic and foreign air transportation. As the holding company of Xiamen Airlines, China Southern Airlines (600029) also has the concept of benefiting from the three links to a certain extent. As my country's aviation market continues to boom, airlines' profitability continues to improve. China Southern Airlines (600029) is the leader in my country's aviation industry. It has the largest number of aircraft, route network and market share in the country. The company has formed a large triangle structure through reorganization and expanded and improved its network structure. The aircraft purchased by the company in the early stage will significantly increase its transportation capacity. Due to the rapid development of domestic tourism and the fact that some major international conferences will be held in my country, it has brought huge opportunities to the development of the aviation industry. The increase in the company's transportation capacity will undoubtedly give it a competitive advantage. be further consolidated.

5. Purchase of Boeing to enhance transportation capacity. In addition, the board of directors of China Southern Airlines reviewed and approved on April 18 that Xiamen Airlines, a subsidiary of China Southern Airlines, signed a contract with the American Boeing Company to purchase 20 Boeing 737 series aircraft. According to the contract, Boeing will deliver all the above-mentioned aircraft from April 2014 to October 2015. The actual transaction amount of the above-mentioned aircraft will be lower than the public market quotation, totaling approximately US$1.5 billion, and the funding source will be provided by Xiamen Airlines’ own funds and commercial bank loan financing.

Recommendation: In the secondary market, the sharp drop in oil prices and the realization of the major three links are actual benefits for the aviation sector. In the past two days, China Southern Airlines (600029) has experienced moderate volume increases and significant capital injections. With the broader market leading the rebound, the stock is very likely to rebound strongly and is expected to become a new leading stock.