Cathy Pacific acquires Hong Kong Express Airways for over $628 million
After prolonged discussions, Cathay Pacific Airways announced on Wednesday its plans to buy Hong Kong Express Airways from cash-strapped conglomerate HNA Group for 4.93 billion HKD ($628.1 million).
According to the terms of the deal, 2.25 billion HKD comprise will be paid in cash while 2.68 billion HKD will be paid through promissory loan notes. However, full-service carrier Hong Kong Airlines is not part of the deal.
The acquisition came after Cathay’s prolonged desire to gain foothold in the budget travel market. For this, Cathay intends to continue operating HK Express as a standalone carrier using a low-cost business model. Cathay’s CEO further explained that Hong Kong Express so far has been unable to capture the unique market segment of budget travel. He expects that the acquisition will help stimulate new travel demand based on the lower price point. It should also enable Cathay to gain more slots at the Hong Kong International Airport, which has so far limited its ability to compete with peers like Singapore Airlines and Qantas Airways.
The acquisition also revealed that HK Express reported a 141 million HKD net loss in 2018 and had a net asset value of 1.12 billion HKD.
This move is in-line with Cathy’s turnaround around plan designed to cut costs and boost revenue to make itself more competitive with Chinese and Middle Eastern rivals, and other low-cost carriers.
HNA Group has long been struggling and is currently more than a year into the process of breaking away from a $50 billion acquisition spree, that in its full glory won stakes in banks, fund managers, hotels, property and airlines, among other assets.
Momentum Indicator for SAVEQ turns negative, indicating new downward trend
SAVEQ saw its Momentum Indicator move below the 0 level on December 17, 2024. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 103 similar instances where the indicator turned negative. In of the 103 cases, the stock moved further down in the following days. The odds of a decline are at .
Technical Analysis (Indicators)
Bearish Trend Analysis
Following a 3-day decline, the stock is projected to fall further. Considering past instances where SAVEQ declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where SAVEQ's RSI Oscillator exited the oversold zone, of 34 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 5 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
The Moving Average Convergence Divergence (MACD) for SAVEQ just turned positive on December 04, 2024. Looking at past instances where SAVEQ's MACD turned positive, the stock continued to rise in of 46 cases over the following month. The odds of a continued upward trend are .
Following a +35 3-day Advance, the price is estimated to grow further. Considering data from situations where SAVEQ advanced for three days, in of 232 cases, the price rose further within the following month. The odds of a continued upward trend are .
SAVEQ may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. SAVEQ’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.090) is normal, around the industry mean (3.830). P/E Ratio (0.000) is within average values for comparable stocks, (41.609). SAVEQ's Projected Growth (PEG Ratio) (0.000) is slightly lower than the industry average of (0.866). SAVEQ has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.038). P/S Ratio (0.009) is also within normal values, averaging (1.420).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. SAVEQ’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 93, placing this stock worse than average.
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a provider of air transportation services
Industry Airlines