China is contemplating the restart of purchases of Boeing (NYSE:BA)'s 737 MAX aircraft, with an official announcement expected at the upcoming APEC Summit in San Francisco. This development signals a potential thaw in the strained Sino-US relationship and could mark a significant shift in the aviation industry.
The news comes as the world anticipates the Asia-Pacific Economic Cooperation (APEC) Summit, where economic leaders from the region gather to discuss trade and cooperation. Sources close to the matter revealed that China might formalize its decision through an order or memorandum during the summit. This strategic move precedes a scheduled meeting on Wednesday between US President Joe Biden and Chinese President Xi Jinping, although details of the agreement could change or even be retracted.
Boeing's sales in China have been on hold since 2018 following two fatal crashes that led to a worldwide grounding of the 737 MAX model. Additionally, escalating tensions between the United States and China have further hindered commercial transactions. Despite these challenges, Boeing has been preparing for a resurgence in sales, with approximately 85 of these jets currently stored and awaiting delivery to Chinese carriers. The company has set a goal to deliver between 375 and 400 planes globally within this year.
The possible resumption of orders from China would not only boost Boeing's presence in one of the world's largest aviation markets but also signify a warming of diplomatic ties between the two economic powerhouses. The aviation industry, which has faced significant hurdles over recent years, is closely watching this potential breakthrough, understanding its implications for global trade and airline operations.
InvestingPro Insights
In light of the recent news, it's worth noting some key InvestingPro Tips and data for Boeing. Despite being a prominent player in the Aerospace & Defense industry, analysts do not anticipate the company will be profitable this year. The company has been trading at a high EBIT and EBITDA valuation multiple, and the price has fallen significantly over the last three months.
InvestingPro's real-time data shows that Boeing's market cap is currently 118.97B USD. Over the last twelve months as of Q3 2023, the company's revenue growth was 23.34%, indicating an acceleration in its revenue. However, the company's P/E Ratio was -40.73, and its gross profit margin was 11.44%, pointing to weak gross profit margins.
These insights provide a broader understanding of Boeing's current financial situation. For a more in-depth analysis and additional InvestingPro Tips, consider exploring InvestingPro's suite of tools and resources.
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