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Equities

China Southern shares ascend in Hong Kong after profit pickup

Two other major mainland airlines hit by earnings declines

HONG KONG -- China Southern Airlines shares rallied sharply on Friday morning on the Hong Kong bourse, a day after the company became the only major Chinese carrier to report earnings growth.

The share price at one point rose 0.140 Hong Kong dollars, or 2.66%, on the day to HK$5.390. The company closed the morning session at HK$5.370.

After trading wrapped up on Thursday, China Southern Airlines announced a net profit of 5.044 billion yuan ($731 million) for the year ended December, up 35% from the previous year. The country's other two leading airlines -- Air China and China Eastern Airlines -- posted drops in annual profit.

Sales at China Southern Airlines also grew 3%, to 114.9 billion yuan, for the year. An increase in the number of flights to inland areas and other factors contributed to both sales and profit growth.

Net profit at Air China, on the other hand, declined 4% after Hong Kong-based Cathay Pacific Airways, in which Air China holds a stake, sank into the red. China Eastern Airlines recorded a slight fall in its profit amid intense competition for the growing number of passengers in the market.

All three carriers are also listed on the Shanghai Stock Exchange, where their shares slipped on Friday morning.

China Southern Airlines on Tuesday announced to accept investment from American Airlines, making it the last of China's big three to forge a partnership with a U.S. carrier.

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