Shares of Beijing-based travel company, TravelSky Technology, took a nosedive after the company released its disappointing guidance for 2023 earnings. The stock dropped a staggering 23% to 9.78 Hong Kong dollars (US$1.25) on Wednesday morning, marking its largest one-day percentage decline on record.
Late Tuesday, TravelSky announced that it expects its net profit for 2023 to be in the range of 1.25 billion yuan (US$174.3 million) to CNY1.45 billion, a considerable jump from the CNY679 million recorded in 2022. The projected increase in profit is attributed to the anticipated rise in the number of civil aviation passengers.
However, analysts from Daiwa, Kelvin Lau and Frank Yip, note that TravelSky's 2023 guidance falls significantly short of their expectations. As a result, they anticipate a correction in the company's share price. On a similar note, analysts from Citi believe that while the initial results appear softer than anticipated, they are waiting for further clarification regarding the weak performance.
Despite these concerns, both banks have maintained their buy ratings on TravelSky.