Assessing Air China (SEHK:753) Valuation After Detailed 2025 Operating Statistics Update

Why Air China’s latest operating update matters for shareholders Air China (SEHK:753) just released detailed operating statistics for December 2025 and the full year, including passenger volumes, cargo tonnes and load factors. This gives investors fresh visibility into how its network is being utilized. See our latest analysis for Air China. Investors appear to be reacting to the detailed December and full year operating release. Air China’s recent 90 day share price return of 21.43% and 1 year total shareholder return of 55.19% point to improving momentum, despite a modest 1 day pullback at the current HK$7.48 share price. If you are looking beyond Air China and want to see what else is taking off in the sector, have a look at aerospace and defense stocks as a starting point. With Air China trading at HK$7.48, alongside an intrinsic discount estimate of 19% and mixed return history, you have to ask: is there still mispricing here, or are markets already baking in future growth? Price-to-Sales of 0.7x: Is it justified? At a P/S of 0.7x and a HK$7.48 share price, Air China screens as cheap relative to both peers and its own estimated fair level. The P/S ratio compares the company’s market value to its revenue. It is often used for airlines where earnings can be volatile or temporarily distorted by one off items. For Air China, our data flags that it is trading at good value compared to peers and the broader industry, suggesting the market is pricing its revenue stream more cautiously than competitors. Versus direct peers on a 1.4x P/S and the Asian airlines industry on 0.9x, Air China’s 0.7x stands out as a clear discount. Compared to an estimated fair P/S of 1.1x, the gap appears wider, indicating a level the market may move toward if sentiment and fundamentals align. Explore the SWS fair ratio for Air China Result: Price-to-Sales of 0.7x (UNDERVALUED) However, you still need to weigh risks such as volatile net income of CN¥270.784 and the 1.6% three-year total return that trails the recent one-year surge. Find out about the key risks to this Air China narrative. Another View: What Our DCF Model Says While the 0.7x P/S points to value versus peers, our DCF model adds another angle. On this approach, Air China at HK$7.48 is trading below an estimated future cash flow value of HK$9.28, which also suggests the shares are undervalued. Both methods lean in the same direction, but each rests on different assumptions about revenue quality, cash flows and risk. The real question for you is which set of assumptions you find more realistic, and how much uncertainty you are comfortable with. Look into how the SWS DCF model arrives at its fair value. 753 Discounted Cash Flow as at Jan 2026Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Air China for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 877 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. Build Your Own Air China Narrative If you look at these numbers and reach a different conclusion, or simply prefer to rely on your own homework, you can build a personalised view in just a few minutes with Do it your way. A great starting point for your Air China research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision. Ready to uncover more investment ideas? If you stop with just one idea, you could miss other opportunities that fit your style, so keep building your watchlist with a few focused screens. Spot potential bargains early by scanning these 877 undervalued stocks based on cash flows that may be priced cautiously relative to their underlying cash flows. Ride powerful tech trends by looking at these 23 AI penny stocks that are connected to artificial intelligence themes across different industries. Target income-focused opportunities by reviewing these 13 dividend stocks with yields > 3% that might strengthen your portfolio’s cash yield. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.