# Air China (601111.SHG)

Canonical: https://gigainvestors.com/s/601111.SHG

Analysis as of: 2026-10-16T07:34:56.191Z. Financial observations: FY2002–FY2025.

Listing currency: CNY. Reporting currency: CNY.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: CNY 5.59 per share; close as of 2026-10-15.

## Checklist

### understandable: fail

- 3 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- negative average operating margin

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 6

- Operating margin variation: 2.36×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.07×

- FY2017: 0.10×

- FY2018: 0.07×

- FY2019: 0.07×

- FY2020: -0.27×

- FY2021: -0.29×

- FY2022: -0.87×

- FY2023: -0.02×

- FY2024: -0.02×

- FY2025: -0.03×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: -1.2%

- ROIC, second-lowest year: -7.6%

- Typical minus recent gross margin: 0.2 pp

- Typical gross margin (annual median): 5.0%

- Recent gross margin (lower of latest and 3-year median): 4.9%

- Years with nonpositive capital: 0

- Capital spending / revenue: 13.2%

- ROIC including acquisitions, ten-year median: -2.7%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 3.6%

- FY2017: 5.0%

- FY2018: 4.5%

- FY2019: 5.4%

- FY2020: -6.4%

- FY2021: -7.6%

- FY2022: -15.0%

- FY2023: -1.0%

- FY2024: -1.4%

- FY2025: -1.4%

### economics: fail

- owner earnings cash conversion below threshold

- incremental invested capital return below threshold

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: CNY -108B

- Net income, five-year total: CNY -58B

- Return on incremental invested capital: -123.1%

- Working capital / revenue, annual change: 0.4 pp

- Working capital / revenue, change between three-year averages: 2.8 pp

- Working capital / revenue, final three-year average: -0.9%

Chart: Owner earnings · five years; fiscal year observations.

- FY2021: CNY -29B

- FY2022: CNY -53B

- FY2023: CNY -14B

- FY2024: CNY -12B

- FY2025: CNY -776M

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 4.5% vs -1.4%

- Per-share earnings: 0.55 to -0.06 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- five-year and ten-year diluted share growth both above threshold

- acquired goodwill and intangibles (proxy) exceeds half of ten-year net income with low and deteriorating ROIC

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 3.6%

- Ordinary dilution, 5-year annual growth: 5.4%

- Market cap gain: CNY 76B

- Cumulative retained earnings: CNY -66B

- Diluted shares, 10-year annual growth: 3.6%

- Diluted shares, 5-year annual growth: 5.4%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value change: CNY -0.62

- Per-share value, starting three-year median: CNY 0.55

- Per-share value, ending three-year median: CNY -0.06

- Buyback history: 0 years

- Debt-funded buybacks: No

- Acquisition spending: CNY 5.6B

- Cumulative net income, 10 years: CNY -45B

- ROIC, first three-year median: 4.5%

- ROIC, last three-year median: -1.4%

Chart: Earnings per share; fiscal year observations.

- FY2016: CNY 0.56

- FY2017: CNY 0.54

- FY2018: CNY 0.55

- FY2019: CNY 0.46

- FY2020: CNY -1.07

- FY2021: CNY -1.21

- FY2022: CNY -2.66

- FY2023: CNY -0.06

- FY2024: CNY -0.01

- FY2025: CNY -0.10

### accounting: pass

- Sloan accruals: -13.0%

- Receivables to sales index (DSRI): 0.89×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.23×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -10.7%

- FY2017: -8.1%

- FY2018: -9.9%

- FY2019: -10.9%

- FY2020: -5.6%

- FY2021: -9.9%

- FY2022: -7.4%

- FY2023: -10.9%

- FY2024: -10.1%

- FY2025: -13.0%

## Holders

## Price story

Down 52% since Jun 2022 · sales +2.9%

Story as of 2026-10-16T10:00:03.057Z; price observation 2026-10-15.

### Sales · FY2024–2025

sales +2.9%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: CNY 113B 

- FY2017: CNY 121B 

- FY2018: CNY 137B 

- FY2019: CNY 136B 

- FY2020: CNY 70B 

- FY2021: CNY 75B 

- FY2022: CNY 53B 

- FY2023: CNY 141B 

- FY2024: CNY 167B 

- FY2025: CNY 171B 

### Gross margin · FY2025

gross margin 4.9%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 22.5% 

- FY2017: 17.1% 

- FY2018: 15.8% 

- FY2019: 16.8% 

- FY2023: 5.0% 

- FY2024: 5.1% 

- FY2025: 4.9% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in airlines; annual sales are CNY 171.5 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:56.191Z); FY2025: revenue 171484646000; grossProfit 8355923000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 601111.SHG: Air China Limited, together with its subsidiaries, provides air passenger, air cargo, and airline-related services in Mainland China, Hong Kong, Macau, Taiwan, and internationally. It operates in Airline Operations and Other Operations segments. The company provides aircraft engineering and airport ground handling services. It is also involved in the import and export trading business; wholesale and import of aircraft parts; aircraft engine maintenance; aviation information technology consulting; and provision of cabin, airline catering, air ticketing and catering, human resources, aircraft overhaul and maintenance, and financial services. The company was founded in 1988 and is headquartered in Beijing, the People's Republic of China.

### Why customers stay

Margins ranged from 4.9% to 5.1% during 2023–25; it lost 1.2% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:56.191Z); FY2023: grossProfit / revenue = 5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:56.191Z); FY2024: grossProfit / revenue = 5.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:56.191Z); FY2025: grossProfit / revenue = 4.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:56.191Z); 10-year return on capital observations [[2016,0.035736187103324844],[2017,0.05017458155020672],[2018,0.04490480008328669],[2019,0.05408927985610383],[2020,-0.06367176204629003],[2021,-0.0762287183930307],[2022,-0.15023661749889236],[2023,-0.009882401277448459],[2024,-0.013633475026224945],[2025,-0.014189672474370956]]; median -0.011757938151836702. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:56.191Z); FY2016: growth capex 5806560804.743759; upkeep 14828892195.25624; owner earnings 5493690804.743759. Growth capex / owner earnings = 1.0569507842942014.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:56.191Z); FY2017: growth capex 4020750000; upkeep 13622554000; owner earnings 7240312000. Growth capex / owner earnings = 0.5553282786708639.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:56.191Z); FY2018: growth capex 0; upkeep 12307679000; owner earnings 9555601000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:56.191Z); FY2019: growth capex 0; upkeep 13108682000; owner earnings 3115802000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:56.191Z); Dividend observations: [[2016,4758195000],[2017,5116826000],[2018,4405639000],[2019,6240963000],[2020,6070239000],[2021,5757299000],[2022,6579396000],[2023,7513966000],[2024,6561686000],[2025,5670983000]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 77.5% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 601111.SHG SharesStats.PercentInsiders = 77.462 percentage points; cache date 2026-10-16.

### What the price says

The price is 0.6 times annual sales; cash earnings are negative.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:56.191Z); Closing price 5.59 CNY; reporting-to-trading FX 1; FY2025 annual sales per share 9.828089659230482; price multiple 0.5687778799158497. FY2025 cash earnings/share -0.04447561186195587. Closing-price date 2026-10-15.

## Monthly share-price history (CNY per share)

- 2016-10: CNY 7.40 per share

- 2016-11: CNY 7.95 per share

- 2016-12: CNY 7.20 per share

- 2017-01: CNY 7.58 per share

- 2017-02: CNY 7.90 per share

- 2017-03: CNY 8.29 per share

- 2017-04: CNY 8.89 per share

- 2017-05: CNY 10.16 per share

- 2017-06: CNY 9.75 per share

- 2017-07: CNY 8.84 per share

- 2017-08: CNY 9.27 per share

- 2017-09: CNY 8.72 per share

- 2017-10: CNY 9.49 per share

- 2017-11: CNY 11.14 per share

- 2017-12: CNY 12.32 per share

- 2018-01: CNY 13.20 per share

- 2018-02: CNY 13.81 per share

- 2018-03: CNY 11.85 per share

- 2018-04: CNY 11.71 per share

- 2018-05: CNY 11.00 per share

- 2018-06: CNY 8.89 per share

- 2018-07: CNY 7.75 per share

- 2018-08: CNY 7.77 per share

- 2018-09: CNY 8.15 per share

- 2018-10: CNY 7.50 per share

- 2018-11: CNY 8.18 per share

- 2018-12: CNY 7.64 per share

- 2019-01: CNY 8.21 per share

- 2019-02: CNY 9.88 per share

- 2019-03: CNY 10.84 per share

- 2019-04: CNY 9.84 per share

- 2019-05: CNY 8.46 per share

- 2019-06: CNY 9.57 per share

- 2019-07: CNY 8.95 per share

- 2019-08: CNY 7.89 per share

- 2019-09: CNY 8.00 per share

- 2019-10: CNY 8.30 per share

- 2019-11: CNY 8.45 per share

- 2019-12: CNY 9.69 per share

- 2020-01: CNY 8.25 per share

- 2020-02: CNY 7.46 per share

- 2020-03: CNY 6.51 per share

- 2020-04: CNY 7.25 per share

- 2020-05: CNY 6.47 per share

- 2020-06: CNY 6.61 per share

- 2020-07: CNY 6.83 per share

- 2020-08: CNY 7.25 per share

- 2020-09: CNY 7.09 per share

- 2020-10: CNY 6.79 per share

- 2020-11: CNY 7.88 per share

- 2020-12: CNY 7.49 per share

- 2021-01: CNY 7.20 per share

- 2021-02: CNY 8.09 per share

- 2021-03: CNY 9.05 per share

- 2021-04: CNY 8.18 per share

- 2021-05: CNY 8.41 per share

- 2021-06: CNY 7.78 per share

- 2021-07: CNY 6.58 per share

- 2021-08: CNY 7.24 per share

- 2021-09: CNY 7.44 per share

- 2021-10: CNY 8.51 per share

- 2021-11: CNY 7.98 per share

- 2021-12: CNY 9.13 per share

- 2022-01: CNY 10.02 per share

- 2022-02: CNY 9.88 per share

- 2022-03: CNY 9.11 per share

- 2022-04: CNY 9.47 per share

- 2022-05: CNY 9.69 per share

- 2022-06: CNY 11.61 per share

- 2022-07: CNY 9.65 per share

- 2022-08: CNY 10.31 per share

- 2022-09: CNY 10.47 per share

- 2022-10: CNY 9.67 per share

- 2022-11: CNY 10.46 per share

- 2022-12: CNY 10.60 per share

- 2023-01: CNY 10.33 per share

- 2023-02: CNY 11.11 per share

- 2023-03: CNY 10.70 per share

- 2023-04: CNY 10.65 per share

- 2023-05: CNY 8.72 per share

- 2023-06: CNY 8.24 per share

- 2023-07: CNY 9.35 per share

- 2023-08: CNY 8.65 per share

- 2023-09: CNY 8.08 per share

- 2023-10: CNY 8.02 per share

- 2023-11: CNY 8.07 per share

- 2023-12: CNY 7.34 per share

- 2024-01: CNY 7.11 per share

- 2024-02: CNY 7.48 per share

- 2024-03: CNY 7.30 per share

- 2024-04: CNY 7.38 per share

- 2024-05: CNY 7.47 per share

- 2024-06: CNY 7.38 per share

- 2024-07: CNY 7.29 per share

- 2024-08: CNY 6.98 per share

- 2024-09: CNY 7.88 per share

- 2024-10: CNY 7.33 per share

- 2024-11: CNY 8.28 per share

- 2024-12: CNY 7.91 per share

- 2025-01: CNY 7.48 per share

- 2025-02: CNY 7.24 per share

- 2025-03: CNY 7.12 per share

- 2025-04: CNY 7.07 per share

- 2025-05: CNY 8.02 per share

- 2025-06: CNY 7.89 per share

- 2025-07: CNY 7.27 per share

- 2025-08: CNY 7.55 per share

- 2025-09: CNY 7.91 per share

- 2025-10: CNY 7.86 per share

- 2025-11: CNY 8.03 per share

- 2025-12: CNY 9.37 per share

- 2026-01: CNY 8.31 per share

- 2026-02: CNY 8.41 per share

- 2026-03: CNY 6.73 per share

- 2026-04: CNY 6.73 per share

- 2026-05: CNY 6.81 per share

- 2026-06: CNY 6.05 per share

- 2026-07: CNY 6.25 per share

- 2026-08: CNY 5.83 per share

- 2026-09: CNY 5.91 per share

- 2026-10: CNY 5.71 per share

## Annual estimated value (CNY per share)

- FY2016: low CNY 4.76 per share, central CNY 6.02 per share, high CNY 6.96 per share

- FY2017: low CNY 5.89 per share, central CNY 7.73 per share, high CNY 9.00 per share

- FY2018: low CNY 8.69 per share, central CNY 12.26 per share, high CNY 14.33 per share

- FY2019: low CNY 6.87 per share, central CNY 7.75 per share, high CNY 8.92 per share

- FY2020: low CNY 3.15 per share, central CNY 3.53 per share, high CNY 4.04 per share

- FY2021: low CNY 2.45 per share, central CNY 2.64 per share, high CNY 2.89 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.