Juneyao Airlines Co., Ltd (603885.SS) Bundle
Peeling back the numbers behind Juneyao Airlines Co., Ltd (603885.SS) reveals a company at a crossroads: Q3 operating revenue stood at RMB 6.41 billion (down 1.88% YoY) with year-to-date revenue nearly flat at RMB 17.48 billion, while Q3 net profit attributable to shareholders fell to RMB 583.9 million (down 25.29% YoY) and YTD net profit slid 14.28% to RMB 1.09 billion - coupled with a trailing twelve-month net profit margin of 3.32% and EBITDA of RMB 4.56 billion (EBITDA margin ~20.6%); however, leverage remains elevated with a total debt-to-equity ratio of 358.50% and debt-to-EBITDA of 6.42, liquidity appears strained (current ratio 0.31, quick ratio 0.23) despite cash and short-term investments jumping 65.86% to RMB 2.87 billion, and investors must weigh valuation metrics - P/E at 40.05, P/S 1.30, P/B 2.93, EV/EBITDA 11.14 - alongside clear risks like oil and FX volatility, Pratt & Whitney engine issues, and capex demands versus growth levers such as international route expansion, new Boeing 787-9 capacity, ancillary revenue opportunities, and improving post-pandemic load factors (domestic 88.05% H1 2025) that could materially change the story for shareholders
Juneyao Airlines Co., Ltd (603885.SS) - Revenue Analysis
- Operating revenue in Q3 2025: RMB 6.41 billion (-1.88% YoY).
- Year-to-date (YTD) operating revenue through Q3 2025: RMB 17.48 billion (-0.06% YoY, nearly flat).
- Net profit attributable to shareholders in Q3 2025: RMB 583.9 million (-25.29% YoY).
- YTD net profit through Q3 2025: RMB 1.09 billion (-14.28% YoY).
- Basic and diluted EPS in Q3 2025: RMB 0.27 (-25.00% YoY); YTD EPS: RMB 0.50 (-13.79% YoY).
| Metric | Q1 2025 | Q3 2025 (Q3 only) | YTD through Q3 2025 | YoY change (YTD) |
|---|---|---|---|---|
| Operating revenue | RMB 5.72 bn (Q1) | RMB 6.41 bn | RMB 17.48 bn | -0.06% |
| Net profit attributable to shareholders | RMB 350 mn (Q1 net profit: RMB 0.35 bn, -7.9% YoY) | RMB 583.9 mn | RMB 1.09 bn | -14.28% |
| Basic & diluted EPS | - | RMB 0.27 | RMB 0.50 | -13.79% |
- Passenger volumes (H1 2025 vs. 2019 comparison): domestic 11.3379 million (119.85% of H1 2019), international 2.1011 million (180.63% of H1 2019), regional 0.1514 million (72.79% of H1 2019).
- Load factors (H1 2025): domestic 88.05%, international 78.44%, regional 85.16%.
| H1 2025 Passenger Metrics | Volume | % of H1 2019 | Load Factor |
|---|---|---|---|
| Domestic | 11.3379 million | 119.85% | 88.05% |
| International | 2.1011 million | 180.63% | 78.44% |
| Regional | 0.1514 million | 72.79% | 85.16% |
- Operational context: Q1 2025 operating income was RMB 5.72 billion (↑0.05% YoY) while Q1 net profit was RMB 0.35 billion (-7.9% YoY), indicating early‑year revenue stability but margin pressure.
- Profitability trend: sharp QoQ/YTD declines in net profit and EPS signal rising costs or weaker yield management despite near‑flat revenue YTD.
Juneyao Airlines Co., Ltd (603885.SS) - Profitability Metrics
Juneyao Airlines' recent trailing twelve months (TTM) profitability snapshot shows modest margins and returns consistent with a capital‑intensive airline operating environment. Key headline figures are presented below, followed by concise context and implications for investors.- Net profit margin (TTM): 3.32% - indicates thin net earnings relative to revenue after operating, financing and tax costs.
- Return on equity (ROE, TTM): 7.67% - reflects shareholder returns given current net income and equity base.
- Return on assets (ROA, TTM): 2.67% - shows asset productivity in generating profit.
- Return on invested capital (ROIC, TTM): 2.94% - measures after‑tax operating return on invested capital; under typical WACC levels for airlines.
- EBITDA (TTM): RMB 4.56 billion - core operating cash earnings before non‑cash and financing items.
- EBITDA margin (TTM): ~20.6% - healthy operating cash margin relative to revenues for the period.
| Metric | TTM Value | Units / Notes |
|---|---|---|
| Net profit margin | 3.32% | Percent of revenue |
| Return on equity (ROE) | 7.67% | Percent |
| Return on assets (ROA) | 2.67% | Percent |
| Return on invested capital (ROIC) | 2.94% | Percent |
| EBITDA | RMB 4.56 billion | Trailing twelve months |
| EBITDA margin | 20.6% | Percent of revenue (approx.) |
- Investors looking for deeper context on ownership, trading patterns and investor profile can read: Exploring Juneyao Airlines Co., Ltd Investor Profile: Who's Buying and Why?
- Key monitoring points: margin trends over quarterly reports, fleet utilization impacts on ROA/ROIC, and sensitivity of net margin to fuel/foreign‑exchange and interest costs.
Juneyao Airlines Co., Ltd (603885.SS) - Debt vs. Equity Structure
Juneyao Airlines' balance-sheet profile as of June 2025 shows a capital structure heavily skewed toward liabilities. Key leverage and coverage metrics indicate elevated financial risk relative to equity and operating cash generation.- Total liabilities (June 2025): RMB 40.86 billion - up 7.83% year-over-year.
- Total equity (June 2025): RMB 9.14 billion.
- Total debt-to-equity ratio: 358.50% (substantial leverage).
- Debt-to-EBITDA ratio: 6.42 (high relative leverage versus earnings).
- Debt-to-free cash flow ratio: 5.41 (debt several times free cash flow).
- Interest coverage ratio: 1.83 (limited cushion to meet interest expense).
| Metric | Value | Comment |
|---|---|---|
| Total liabilities (Jun 2025) | RMB 40.86 billion | 7.83% YoY increase |
| Total equity (Jun 2025) | RMB 9.14 billion | Base for leverage calculations |
| Total debt-to-equity | 358.50% | Indicates debt >3.5x equity |
| Debt-to-EBITDA | 6.42 | High multiple vs. earnings |
| Debt-to-free cash flow | 5.41 | Debt several years of FCF |
| Interest coverage | 1.83 | Interest expense ~55% of EBIT |
- Implications for liquidity: rising liabilities and limited interest coverage suggest sensitivity to revenue shocks or higher interest rates.
- Capital allocation constraints: high leverage may limit dividend flexibility and capital expenditures unless deleveraging occurs.
- Investor considerations: monitor EBITDA trends, free cash flow generation, and any debt refinancing or equity injections.
Juneyao Airlines Co., Ltd (603885.SS) - Liquidity and Solvency
Juneyao Airlines' mid-2025 balance-sheet dynamics show a company with constrained short-term liquidity but improving cash buffers and stable asset growth relative to liabilities. Key headline figures for June 2025 and trailing twelve months (TTM):- Current ratio: 0.31 (indicates short-term obligations substantially exceed current assets)
- Quick ratio: 0.23 (very limited immediate liquid coverage excluding inventories)
- Cash and short-term investments: RMB 2.87 billion (up 65.86% YoY)
- Total assets: RMB 50.00 billion (up 7.92% YoY)
- Total liabilities: RMB 40.86 billion (up 7.83% YoY)
- Net profit margin (TTM): 3.32%
| Metric | Value | YoY Change | Interpretation |
|---|---|---|---|
| Current Ratio | 0.31 | - | Short-term liquidity coverage is low; potential reliance on refinancing or operational cash flow |
| Quick Ratio | 0.23 | - | Very limited immediate liquid assets after excluding inventories |
| Cash & Short-term Investments | RMB 2.87 billion | +65.86% | Significant YoY improvement in available cash reserves |
| Total Assets | RMB 50.00 billion | +7.92% | Asset base growing moderately |
| Total Liabilities | RMB 40.86 billion | +7.83% | Liabilities rising in line with assets; leverage remains material |
| Net Profit Margin (TTM) | 3.32% | - | Positive operating profitability, though slim margin typical for airlines |
- Strengths: material increase in cash & short-term investments (RMB 2.87bn, +65.86% YoY) providing a buffer against volatility.
- Risks: very low current and quick ratios (0.31 and 0.23) signal short-term liquidity stress and dependence on financing or operating cash inflows.
- Balance-sheet profile: assets and liabilities grew at nearly identical rates (~7.9% vs ~7.8%), keeping leverage broadly stable but still elevated.
- Profitability context: TTM net profit margin of 3.32% indicates modest profitability that may limit internal cash generation to cover short-term gaps.
Juneyao Airlines Co., Ltd (603885.SS) Valuation Analysis
Juneyao Airlines' valuation metrics present a snapshot of market expectations and capital structure effects; key ratios used by investors to gauge relative value and cash-generation efficiency are presented below.- Price-to-earnings (P/E): 40.05 - indicates the market is pricing the stock at 40.05 times reported earnings.
- Price-to-sales (P/S): 1.30 - the market values the company at 1.30 times annual revenues.
- Price-to-book (P/B): 2.93 - the equity market values Juneyao at nearly three times its book value.
- EV/EBITDA: 11.14 - enterprise value is 11.14 times operating cash profits before D&A.
- EV/FCF: 9.39 - enterprise value is 9.39 times free cash flow, indicating the market multiple placed on cash generation.
- EV/Sales: 2.77 - enterprise value equals 2.77 times annual revenue, reflecting both debt and equity claims.
| Valuation Metric | Value | Interpretive note |
|---|---|---|
| P/E | 40.05 | High multiple vs. cyclical airline earnings - implies elevated growth expectations or compressed near-term earnings. |
| P/S | 1.30 | Moderate sales multiple - balances revenue scale against profitability margins. |
| P/B | 2.93 | Price relative to net assets suggests a premium to book value. |
| EV/EBITDA | 11.14 | Enterprise-level earnings multiple commonly used for cross-company comparables. |
| EV/FCF | 9.39 | Shows how many years of present free cash flow would be required to cover enterprise value. |
| EV/Sales | 2.77 | Reflects combined equity and debt valuation per unit of revenue. |
- Relative emphasis: EV multiples (EV/EBITDA, EV/FCF, EV/Sales) incorporate debt and are useful for capital-structure-neutral comparisons across carriers.
- Equity multiples (P/E, P/S, P/B) reflect investors' expectations for earnings growth, revenue scalability, and balance-sheet premium.
- Investors may cross-check these ratios against peers, historical ranges, and operational drivers (load factor, yield, fuel costs, fleet utilization).
Juneyao Airlines Co., Ltd (603885.SS) Risk Factors
The following section breaks down the principal risks that materially affect Juneyao Airlines' operating results, cash flow and balance sheet resilience, and provides quantitative scenario-style illustrations where appropriate.- Fuel price exposure: fuel is one of the largest variable costs for Juneyao Airlines. Historically, jet fuel has represented roughly 20-30% of operating costs for full-service and hybrid carriers in China; using a midpoint assumption of ~25% implies that a sustained 20% rise in jet fuel prices could increase total operating costs by ~5 percentage points, compressing operating margin by a similar magnitude absent fare or capacity adjustments.
- Exchange rate volatility: Juneyao reports primarily in CNY, while major liabilities (aircraft leases, engine maintenance reserves, part purchases) are often USD- or EUR-denominated. If ~40-60% of capex and maintenance outflows are USD-linked, a 5% depreciation of the yuan versus the dollar raises local-currency cash outflows for those items by ~5%, pressuring free cash flow and potentially increasing hedging costs.
- Engine and technical reliability: recurring issues with engine types (notably Pratt & Whitney GTF family problems observed industry-wide) can lead to increased AOG (aircraft on ground) days, higher maintenance costs and schedule disruption. An illustrative single-aircraft ground event averaging 7-14 days during peak season can reduce available seat capacity by several thousand seat-km and spike short-term maintenance expense and passenger reaccommodation costs.
- Airfare and yield pressure: a competitive domestic pricing environment or weaker-than-expected ancillary sales can depress yields. If average passenger yield falls 5-10% year-over-year and load factors do not increase to offset the decline, revenue growth can stall despite rising cost bases.
- Macroeconomic sensitivity: GDP growth, consumer confidence and tourism flows critically influence passenger demand. A 1 percentage-point slowdown in domestic GDP growth can translate into a multi-point decline in passenger traffic growth for leisure/business segments, with outsized impact on premium and long-haul demand.
- Capital expenditure and fleet risks: fleet expansion and engine shop visits require large, lumpy cash outlays. If Juneyao pursues fleet growth and upgrades, it faces execution, financing and timing risks; fleet deferrals or unexpected heavy maintenance can materially alter near-term liquidity needs.
| Risk | Typical Financial Exposure | Quantified Scenario (illustrative) |
|---|---|---|
| Jet fuel | ~25% of operating costs (industry midpoint) | 20% sustained fuel spike → operating cost +5 ppt → operating margin decline ~5 ppt |
| FX (CNY vs USD) | ~40-60% of capex/maintenance USD-denominated | 5% CNY depreciation → USD liabilities increase ~5% → cash outflow pressure on capex/maintenance |
| Engine reliability (Pratt & Whitney) | Increased maintenance & AOG losses; schedule disruption | Single narrowbody type ground event (7-14 days) → capacity loss of thousands of ASK, short-term revenue hit CNY millions per aircraft-week |
| Yield/airfare declines | Direct hit to passenger revenue; limited mitigation if capacity remains | 5-10% yield drop with flat pax → revenue down 5-10%; operating leverage amplifies net income reduction |
| Macroeconomic slowdown | Passenger demand elasticity to GDP & tourism trends | 1 ppt GDP slowdown → passenger traffic growth falls multiple ppt; international premium demand disproportionately affected |
| Capex & fleet expansion | Large, lumpy cash requirements; lease vs purchase mix matters | Planned fleet deliveries delayed → fixed commitments + idle capacity costs; unhedged financing increases interest expense |
- Key items to track in Juneyao's filings and investor updates:
- Fuel hedging position and percentage of expected consumption hedged
- Currency hedges and currency mix of debt/leases
- Fleet composition, age profile and Pratt & Whitney engine exposure by tail
- Maintenance reserves, shop visit schedules and recent AOG incidents
- Load factor, RPK/ASK trends, and average yield movement
- Planned capex and committed aircraft/engine delivery schedule
Juneyao Airlines Co., Ltd (603885.SS) - Growth Opportunities
Juneyao Airlines stands at an inflection point where route expansion, fleet modernization, and ancillaries can materially reshape revenue mix and margins. The following section breaks down the main growth vectors with data-driven context and actionable metrics investors should track.
- International route expansion: re-opening and growth of international services post-pandemic has already lifted international ASKs and yielded higher yield per seat on long-haul sectors.
- Wide-body fleet introduction: arrival and deployment of Boeing 787-9 Dreamliners increases long-haul capability and seat-mile economics compared with current narrow-body deployments.
- Debt and financial expense reduction: active debt management and refinancing can reduce interest expense and improve net margins.
- Ancillary revenue opportunities: luggage fees, seat selection, in-flight sales and bundled offers provide durable per-passenger revenue lifts beyond ticket yield.
- Partnerships and code-shares: strategic alliances with international carriers and stronger O&D feed from partners amplify traffic and reduce commercial break-even load factors.
- Capacity utilization: improved load factors on newly-introduced wide-bodies drive outsized profit impact due to higher contribution margins on long-haul flights.
Key baseline metrics to monitor (recent operational context and impact estimates):
| Metric | Recent Value / Status | Why it matters |
|---|---|---|
| Fleet size (approx.) | ~80-100 aircraft | Determines domestic vs international capacity and ability to add long-haul routes |
| Wide-body fleet (B787-9) | Introduction phase - initial units in service | Enables intercontinental routes and unit-cost improvements on long sectors |
| International ASKs (year-on-year change) | Recovered strongly post-2022 - double-digit growth vs pandemic trough | Primary driver of higher-yield traffic and improved network mix |
| Load factor (consolidated) | Typically mid-to-high 70s% during peak demand | Higher load factors on wide-bodies convert directly to higher operating leverage |
| Ancillary revenue per passenger | Low-single-digits (RMB) but growing | Scalable margin uplift with limited capital cost |
| Net interest expense | Material portion of financial expense - trending down with refinancing | Reducing this improves net margin and EPS volatility |
- Route network and revenue mix: prioritizing long-haul routes to markets with strong business and VFR (visiting friends & relatives) demand can lift RPK yields by a meaningful premium vs domestic leisure sectors.
- Aircraft economics: the Boeing 787-9 typically offers 20-30% better seat-mile fuel efficiency vs older long-range types - for Juneyao, each 787 deployed on a profitable intercontinental rotation can meaningfully lower CASM and expand margin per ASK.
- Financial expense management: refinancing higher-cost debt or extending maturities reduces annual interest outflows; a reduction in financial expense of even 10-20% can translate to a notable improvement in net income given thin airline operating margins.
- Ancillary product roadmap: implementing dynamic baggage fees, bundled fares, premium economy, and targeted in-flight retail can lift ancillary revenue contribution from a low base toward industry peers (targeting 5-8% of total revenue over medium term).
- Partnerships & codeshares: expanding codeshares into Europe/NA hubs and deepening interline with alliance partners increases feed, improves aircraft utilization, and reduces unit distribution costs.
- Utilization and network optimization: increasing block hours for wide-bodies and unlocking higher daily rotations improves aircraft productivity; 1-2 additional block hours per wide-body per day can produce outsized yearly incremental revenue.
Projected illustrative scenario (sensitivity-style table showing potential impact of key initiatives):
| Initiative | Primary KPI | Expected Range of Impact (annual) |
|---|---|---|
| Deploy additional B787-9s to intercontinental routes | ASK mix & CASM | +10-25% international ASKs; CASM down 5-12% |
| Expand ancillary fees & services | Ancillary rev / passenger | +RMB 20-60 per pax; ancillary share +2-5 p.p. |
| Refinance/repay high-cost debt | Financial expense | Interest savings of 10-30% → net income uplift |
| New code-share partnerships | Passenger feed & load factor | Load factor +2-6 p.p. on affected routes; yield improvement possible |
Operational and financial KPIs investors should watch quarterly:
- International ASKs and RPKs (growth % vs prior year)
- Consolidated load factor and wide-body load factor separately
- Unit revenue (RASK) and unit cost (CASM) trends, ex-fuel
- Ancillary revenue per passenger and ancillary share of total revenue
- Net interest expense and total debt / EBITDA
- Average fleet age and number of long-haul aircraft in service
For corporate context and strategic framing see: Mission Statement, Vision, & Core Values (2026) of Juneyao Airlines Co., Ltd.
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