Air China EBITDA vs. Current Valuation

AD2 Stock  EUR 0.61  0.02  3.17%   
Based on the key profitability measurements obtained from Air China's financial statements, Air China Limited may not be well positioned to generate adequate gross income at the moment. It has a very high risk of underperforming in January. Profitability indicators assess Air China's ability to earn profits and add value for shareholders.
For Air China profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Air China to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Air China Limited utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Air China's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Air China Limited over time as well as its relative position and ranking within its peers.
  
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Please note, there is a significant difference between Air China's value and its price as these two are different measures arrived at by different means. Investors typically determine if Air China is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Air China's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Air China Limited Current Valuation vs. EBITDA Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Air China's current stock value. Our valuation model uses many indicators to compare Air China value to that of its competitors to determine the firm's financial worth.
Air China Limited is number one stock in ebitda category among its peers. It also is the top company in current valuation category among its peers reporting about  9.76  of Current Valuation per EBITDA. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Air China's earnings, one of the primary drivers of an investment's value.

Air Current Valuation vs. EBITDA

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It is a measure of a company operating cash flow based on data from the company income statement and is a very good way to compare companies within industries or across different sectors. However, unlike Operating Cash Flow, EBITDA does not include the effects of changes in working capital.

Air China

EBITDA

 = 

Revenue

-

Basic Expenses

 = 
4.6 B
In a nutshell, EBITDA is calculated by adding back each of the excluded items to the post-tax profit, and can be used to compare companies with very different capital structures.
Enterprise Value is a firm valuation proxy that approximates the current market value of a company. It is typically used to determine the takeover or merger price of a firm. Unlike Market Cap, this measure takes into account the entire liquid asset, outstanding debt, and exotic equity instruments that the company has on its balance sheet. When a takeover occurs, the parent company will have to assume the target company's liabilities but will take possession of all cash and cash equivalents.

Air China

Enterprise Value

 = 

Market Cap + Debt

-

Cash

 = 
44.9 B
Enterprise Value can be a useful tool to compare companies with different capital structures. Long term liability and current cash or cash equivalents can have a huge impact on market valuation of a given company.

Air Current Valuation vs Competition

Air China Limited is the top company in current valuation category among its peers. After adjusting for long-term liabilities, total market size of Airlines industry is presently estimated at about 79.18 Billion. Air China totals roughly 44.9 Billion in current valuation claiming about 57% of stocks in Airlines industry.

Air China Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Air China, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Air China will eventually generate negative long term returns. The profitability progress is the general direction of Air China's change in net profit over the period of time. It can combine multiple indicators of Air China, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Air China Limited, together with its subsidiaries, provides air passenger, air cargo, and airline-related services in Mainland China, Hong Kong, Macau, Taiwan, Europe, North America, Japan, Korea, the Asia Pacific, and internationally. Air China Limited is a subsidiary of China National Aviation Holding Company. AIR CHINA operates under Airlines classification in Germany and is traded on Frankfurt Stock Exchange.

Air Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Air China. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Air China position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Air China's important profitability drivers and their relationship over time.

Use Air China in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Air China position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Air China will appreciate offsetting losses from the drop in the long position's value.

Air China Pair Trading

Air China Limited Pair Trading Analysis

The ability to find closely correlated positions to Air China could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Air China when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Air China - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Air China Limited to buy it.
The correlation of Air China is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Air China moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Air China Limited moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Air China can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Air China position

In addition to having Air China in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

Did You Try This Idea?

Run Long Short Funds Thematic Idea Now

Long Short Funds
Long Short Funds Theme
Funds or Etfs that are designed to hedge away market risk by investing in combination of bonds, stocks, derivative instruments as well as short positions to maximize returns irrespective of market conditions. The Long Short Funds theme has 42 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Long Short Funds Theme or any other thematic opportunities.
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Other Information on Investing in Air Stock

To fully project Air China's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Air China Limited at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Air China's income statement, its balance sheet, and the statement of cash flows.
Potential Air China investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Air China investors may work on each financial statement separately, they are all related. The changes in Air China's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Air China's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.