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China Southern Airlines’ Performance in a Competitive Market

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Nov. 20 2020, Updated 4:01 p.m. ET

China Southern Airlines compared to its peers

The PE (price-to-earnings) ratio for China Southern Airlines (ZNH) is 5.43x. It’s high compared to China Eastern Airlines (CEA) at 5.37x and Deutsche Lufthansa AG (DLAKY) at 4.85x. Deutsche Lufthansa AG’s current ratio is 0.76, while China Southern Airlines is 0.38. This is quite low.

On the profit margin side, Delta Air Lines (DAL) is ahead of the other companies at 68.20%—compared to China Southern Airlines at 29.91%, China Eastern Airlines at 34.37%, Air France KLM SA (AFLYY) at 34.03%, and Deutsche Lufthansa AG at 20.82%.

According to the above findings, China Southern Airlines’ PE ratio is better than its competitors.

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ETFs that invest in China Southern Airlines 

The Guggenheim Defense Equity ETF (DEF) invests 0.99% of its holdings in China Southern Airlines. DEF tracks an index that aims to outperform in down markets while maintaining upside potential. The equal-weighted index picks 100 US stocks using fundamental and dividend screens.

China Southern Airlines’ industry ETF is the SPDR S&P Aerospace & Defense ETF (XAR).

China Southern Airlines’ performance compared to its ETFs

China Southern Airlines’ YTD (year-to-date) performance is 14.90%. It’s high compared to DEF at -7.98%.

DEF’s PE ratio is 15.84x. China Southern Airlines is trading at a PE ratio of 5.43x. The PB (price-to-book) ratio is also high for DEF at 1.86. It’s 0.88 for China Southern Airlines.

According to the above findings, China Southern Airlines has outperformed its ETFs based on the YTD price movement. In regards to the PE and PB ratios, DEF has outperformed China Southern Airlines.

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