UBS reiterates Cathay Pacific as the top pick in the Asia-Pacific aviation sector, expects this year's profit forecast to exceed expectations

UBS research report pointed out that although the base is already high, Cathay Pacific Airways (00293.HK) management expects the overall financial performance for the full year of 2025 to surpass last year. Although management did not specify the extent of profit growth for the fiscal year 2025, UBS believes this forecast can be seen as better than expected. Cathay's net profit last year was HKD 9.6 billion, the highest level since 2011.

UBS believes that Cathay's fiscal year 2025 profits exceeding expectations will also indicate that the per-share dividend may exceed expectations. According to the company's dividend policy, about half of the profits (after deducting non-cash special items) will be distributed as dividends. The bank also expects Cathay's stock price to respond positively to the fiscal year 2025 profit forecast exceeding expectations and reaffirms Cathay as one of its preferred stocks in the Asia-Pacific aviation sector, setting a target price of HKD 14 and a rating of "Buy."