Goldman Sachs lowered its target price for BOC Aviation (BOCA)(02588) to HK$58.1 from HK$59.2 and maintained its "neutral" rating, given the uncertain outlook and risk of airline bankruptcies or restructurings, which could impact BOCA's cash flows and aircraft/equity value.
BOCA on 30 June said it would be cancelling its order for 30 Boeing 737 MAX. BOCA will also be deferring some orders.
The research house thinks this is marginally positive, as it enables BOCA to de-risk its portfolio through fewer near-term MAX deliveries. Goldman fine-tuned its 2020-22 earnings forecasts by -2% to -4% to reflect the lower capex.