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Goldman’s Call Turns Cathay Into Hong Kong’s Hottest Stock

Cathay Pacific Airways Airplanes
Photographer: Tomohiro Ohsumi/Bloomberg

Cathay Pacific Airways Ltd. is winning back stock investors as the carrier seeks to slash costs after its worst loss in more than 20 years. Having a friend in Goldman Sachs Group Inc. doesn’t hurt, either.

The shares have jumped 6.2 percent this week, the best performance on Hong Kong’s Hang Seng Index, which is little changed. The stock rallied after Goldman Sachs put Cathay Pacific on its conviction list, calling the company unloved and misunderstood. Investors are underestimating the airline’s potential to boost earnings, Goldman analysts led by Ben Hartwright wrote in a note, citing improving demand and supply.