Cathay (293 HK): Air China Sells Down Ahead Of Qatar Airway’s Buyback

• Back on the 5th November 2025, Cathay Pacific Airways (293 HK) announced it planned to acquire Qatar Airways’ 9.57% stake at HK$10.8374/share, or an outlay of HK$6.96bn (~US$890mn).

• This development required SFC approval (granting a MGO waiver), as Swire Pacific (19 HK)‘s stake in Cathay increased to 47.69% (from 43.12%); and Air China’s stake to 31.78% (from 28.74%).

• Curiously, Air China has now entered into a share placing agreement, the result of which would see its stake settle at 29.98% after the Qatar Airways buyback.

The Trade:

• The Qatar Airways buyback boosts Cathay’s EPS by ~10.5%. Shares are up ~16% since the announcement.

• At the time, I suggested getting some exposure to Cathay here; but it wasn’t a high conviction trade.

• Despite the modest sell down, I still believe Air China will (eventually) take full control of Cathay.

• Elsewhere, Swire Pac’s implied stub & NAV discount are at set-up levels.