In a research report published Thursday, Deutsche Bank rated "sell" for China Southern Airlines and down adjusted the target H-share price of the airline company by more than 35 percent to 2.65 Hong Kong dollars.

The report says that though the H-share price of China Southern dropped by more than 50 percent in the second quarter of this year, the bank deems that it still has sliding space.

Deutsche Bank predicted that due to the side affect brought by high inflation rate and bearish stock market, transport volume of Chinese passengers is to decline continuously.

The bank predicted that the ROE deducting exchange gains of China Southern in 2008-2010 is not attractive, at -16 percent, -12 percent and -3 percent, respectively.

The H-share price of China Southern closed at 2.92 Hong Kong dollars Thursday, down 1.02 percent.