Eastern Airlines opened a low, Merrill Lynch preliminary buy 2.6 yuan

To finalize the exchange of shares with Shanghai Airlines (600591-CN) and plan to finance supplementary liquidity of the Eastern Airlines, H-shares this morning after the high low, the share price is still up 6.9% to HK $1.86, 37.7 million shares, but compared to the early 14% of the increase has been significantly lower. Merrill's latest report said it had given the stock an initial rating, at a target price of HK $2.6, at a premium of 40% per cent. The Chinese airline industry will benefit from booming domestic air travel, a factor that will support ticket price increases. Meanwhile, after the planned restructuring with Shanghai Airlines, Oriental Airlines will dominate the Shanghai market (with a market share of 47%).　　The Shanghai market's excessive competition is the main reason for the recent big losses in Eastern airlines, but with the merger of rivals, prices and profits are expected to rise, but if the total number of staff and aircraft can not be reduced, the merged entity will not be able to get the opportunity to slash costs. However, there are market comments that the integration of Eastern airlines and the airlines, although it can reduce competition, but not to promote the effective measures of profit, material news can only bring a brief stimulus to China Eastern Airlines, mainland airlines still face inexperience, and the purchase of aircraft autonomy is not high.