Group 1 - The 138th China Import and Export Fair (Canton Fair) opened on October 15 in Guangzhou and will last until early November, attracting global merchants [1] - China Southern Airlines (CSA) is actively adjusting capacity and optimizing route networks to ensure smooth travel for global merchants during the fair, with over 15,700 flights planned, a 17% increase year-on-year [1] - CSA has opened new routes to Riyadh, Almaty, Tashkent, and Surabaya, which have seen a significant increase in passenger flow two weeks prior to the fair [1] Group 2 - CSA Logistics is leveraging its air cargo network to support the transportation of exhibition goods and order fulfillment, offering customized services for different product categories [2] - During the fair, CSA is enhancing capacity to key cities along the Belt and Road Initiative, establishing an "air green channel" for key exhibition products [2] - CSA is also promoting a unique experience by integrating air travel with cultural tourism, setting up dedicated service points and cultural experience areas at the fair [2]

Core Points - China Southern Airlines has officially launched a direct flight route from Beijing Daxing to Doha, marking its second direct route from a major domestic hub to the Qatari capital [1] - The inaugural flight, operated by an Airbus A330-300, carried 231 passengers and 7.2 tons of cargo, achieving a passenger load factor of over 80% [1] - The new route will operate three times a week on Tuesdays, Thursdays, and Saturdays, with specific flight times detailed for both outbound and return flights [1] - The airline has also introduced through-check baggage services for passengers on this route, enhancing travel convenience [1]

Core Viewpoint - The dismantling of the first aircraft in Xinjiang marks a significant step in developing the aircraft lifecycle industry chain, with substantial potential in the aviation sector as hundreds of aircraft retire annually [1][2]. Group 1: Aircraft Dismantling Operations - The dismantling work for a Boeing 737-700, which has been in operation for 20 years, has commenced at China Southern Airlines Engineering Technology Company’s Xinjiang base [1]. - Aircraft dismantling is a critical component in establishing a comprehensive aircraft lifecycle industry chain [1]. Group 2: Economic Impact - The aircraft dismantling business in Xinjiang represents a breakthrough in the aviation industry chain in Urumqi, building on previous efforts in aircraft bonded maintenance and fuel supply [2]. - This initiative is expected to effectively promote the development of related industries in Urumqi, including aircraft maintenance, material trading, and aviation research and development [2].

Core Points - China Southern Airlines has officially launched its Beijing Daxing to Doha route on October 16, 2023, with the inaugural flight taking off at 0:48 [1] - This marks the second direct flight route from a major domestic hub to Qatar's capital, Doha [1] - The inaugural flight was operated by an Airbus A330-300, carrying 231 passengers and 7.2 tons of cargo, achieving a passenger load factor of over 80% [1] Flight Schedule - The new route will operate three flights per week on Tuesdays, Thursdays, and Saturdays [1] - The outbound flight CZ8059 departs from Beijing Daxing International Airport at 0:35 and arrives at Hamad International Airport in Doha at 5:15 local time [1] - The return flight CZ8060 departs Doha at 8:30 local time and arrives back in Beijing at 21:40 [1] Additional Services - The route has introduced through-check baggage services, allowing passengers to enjoy seamless travel with luggage checked directly to their final destination [1]

Core Viewpoint - The launch of the first aircraft dismantling project in Xinjiang marks a significant breakthrough in the aircraft lifecycle service sector, laying the foundation for establishing an international aviation hub connecting Central Asia and Eurasia [1][2] Group 1: Aircraft Dismantling and Recycling - The dismantling process will focus on recovering usable parts such as engines and landing gear, with plans to dismantle 1,026 components, over 80% of which can be recycled, maximizing the aircraft's value and promoting circular development in the aviation industry [1] - Aircraft dismantling is a crucial step in building a complete aircraft lifecycle industry chain, aligning with national green development strategies and optimizing industrial layout [1] Group 2: Future Developments and Strategic Goals - The base will undertake the dismantling of five aircraft, enhancing maintenance capacity to meet diverse market demands, while leveraging the Xinjiang Free Trade Zone to strengthen the core maintenance hub along the Eurasian air Silk Road [2] - The collaboration between Urumqi International Land Port Area and the Air Economic Zone represents a strategic advancement in the aviation industry chain, promoting the development of related sectors such as aircraft maintenance, material trading, and aviation research [2] - Urumqi aims to strengthen the entire industry chain related to air cargo, passenger services, and aviation, focusing on enhancing processing, maintenance, bonded fuel, logistics, cross-border e-commerce, and aircraft financing leasing [2]

Core Viewpoint - The 138th China Import and Export Fair (Canton Fair) has opened in Guangzhou, with China Southern Airlines (CSA) actively enhancing its capacity and optimizing its route network to facilitate global business travel during the event [1][2]. Group 1: Event Overview - The Canton Fair is recognized as a "barometer" for China's foreign trade, attracting global merchants, with an increasing proportion of exhibitors and buyers from countries along the "Belt and Road" initiative [1]. - CSA has launched new routes to Riyadh, Almaty, Tashkent, and Surabaya, which have seen a significant increase in traffic two weeks prior to the fair, demonstrating the event's strong "magnetic effect" [1]. Group 2: Operational Enhancements - During the Canton Fair, CSA plans to operate over 15,700 flights in and out of Guangzhou, marking a 17% year-on-year increase [2]. - CSA has collaborated with Guangzhou Baiyun International Airport to establish a green security check channel and dedicated check-in counters for the fair, ensuring seamless integration of exhibition services and air travel [2]. Group 3: Logistics and Customer Experience - CSA Logistics is leveraging its air cargo network to support the transportation of exhibition goods and order fulfillment, offering customized services for various product categories [4]. - The airline is enhancing passenger experience by promoting exclusive offers and services for fair attendees in key overseas markets such as Thailand, Japan, and Australia, while also showcasing Chinese cultural elements at the fair [4]. - CSA aims to strengthen connections between "Chinese intelligence manufacturing" and countries involved in the "Belt and Road" initiative, contributing to high-quality development in China's foreign trade [4].

Core Viewpoint - The aviation and airport sector experienced a slight increase of 0.01% on October 16, with HNA Holding leading the gains. The Shanghai Composite Index closed at 3916.23, up 0.1%, while the Shenzhen Component Index closed at 13086.41, down 0.25 [1]. Group 1: Stock Performance - HNA Holding closed at 1.70, up 1.80%, with a trading volume of 7.57 million shares and a transaction value of 1.268 billion [1]. - China Eastern Airlines closed at 4.45, up 1.37%, with a trading volume of 1.857 million shares and a transaction value of 824 million [1]. - China Southern Airlines closed at 6.26, down 0.63%, with a trading volume of 801,400 shares and a transaction value of 505 million [1]. - Xiamen Airport closed at 14.61, down 0.20%, with a trading volume of 15,700 shares and a transaction value of 22.9132 million [1]. Group 2: Capital Flow - The aviation and airport sector saw a net inflow of 77.165 million from institutional investors, while retail investors contributed a net inflow of 196 million. However, speculative funds experienced a net outflow of 273 million [2][3]. - China National Airlines had a net inflow of 126 million from institutional investors, representing 14.80% of its total capital flow [3]. - HNA Holding experienced a net inflow of 99.195 million from institutional investors, accounting for 7.82% of its total capital flow [3].

Investment Rating - The report maintains an "Overweight" rating for the aviation industry, indicating a positive outlook for the sector [4][7]. Core Insights - The aviation industry is experiencing a recovery, with September data showing a 4.6% year-on-year increase in passenger transport volume, reaching approximately 62.7 million passengers [4]. - Domestic capacity increased by 1.0% year-on-year, while domestic passenger flow grew by 3.6% [4]. - The average aircraft utilization rate in September was 7.8 hours per day, reflecting a 0.6% increase year-on-year [4]. - Airlines are increasing capacity, with passenger turnover growth outpacing capacity growth [4]. - The report highlights significant growth in low-cost carriers, particularly Spring Airlines, which saw a 21% increase in capacity [4]. - The international market is recovering, with some airlines exceeding pre-pandemic levels in flight frequency [4]. Summary by Sections September Data Overview - In September, the total passenger transport volume was approximately 62.7 million, a 4.6% increase from the previous year [4]. - Domestic capacity (ASK) for major airlines showed varied growth: China Eastern Airlines (+4%), Southern Airlines (+4%), and Spring Airlines (+21%) [4]. - The average passenger load factor for Spring Airlines was the highest at 91.8%, with a year-on-year increase of 1.3 percentage points [4]. Domestic Market Analysis - The domestic market is balanced in terms of supply and demand, with major airlines showing single-digit growth [4]. - Year-on-year changes in RPK for major airlines included: China Eastern Airlines (+6%), Southern Airlines (+4%), and Spring Airlines (+23%) [4]. International Market Analysis - The international market is seeing further recovery, with significant growth from Spring Airlines and China Eastern Airlines [4]. - Year-on-year changes in ASK compared to 2019 showed China Eastern Airlines (+5%) and Spring Airlines (+131%) [4]. Investment Recommendations - The report suggests that the aviation industry is at a turning point, with airlines expected to see significant improvements in profitability [4]. - Recommended stocks include China Eastern Airlines, China Southern Airlines, Spring Airlines, and others, based on strong supply and demand dynamics [4][7].

Group 1 - The core viewpoint is that major Chinese airlines have reported an increase in key operational metrics for September, leading to a rise in their stock prices [1] - China Eastern Airlines saw a 3.63% year-on-year increase in passenger capacity and an 8.67% increase in passenger turnover for September, with a seat occupancy rate of 87.57%, up 4.06 percentage points year-on-year [1] - China Southern Airlines reported a 4.43% increase in passenger capacity and a 5.25% increase in passenger turnover for September [1] - Air China experienced a 5.6% increase in passenger turnover and an average seat occupancy rate of 83.2%, which is up 3.5 percentage points year-on-year [1] Group 2 - Huatai Securities noted a slight slowdown in capacity growth for airlines in September post-summer travel season, while maintaining high seat occupancy rates [2] - The report indicates that due to a recovery in business travel demand, ticket prices have started to show positive year-on-year growth, with domestic ticket prices increasing by 3.0% from September 1 to October 12 [2] - The outlook suggests that the tightening of flight schedules in the new season, combined with a low base effect, may continue to support positive ticket price growth into the fourth quarter, while falling oil prices could alleviate cost pressures for airlines [2]

Investment Rating - The report maintains an "Overweight" rating for the aviation transportation sector [6]. Core Viewpoints - The aviation sector is showing signs of recovery, with expectations for continued improvement in the fourth quarter and the medium to long term, driven by a rebound in business travel demand and a favorable pricing environment [1][4]. - The supply growth in the industry remains constrained, supporting long-term supply-demand improvements [3][4]. - The report recommends focusing on airlines with potential for sustained growth, specifically highlighting China National Aviation (H), Huaxia Airlines, and Spring Airlines as top picks [1][9]. Summary by Sections Industry Performance - In September, the three major airlines (China Southern, China Eastern, and Air China) saw a slight slowdown in capacity growth at 3.0%, while passenger load factors increased by 2.7 percentage points to 85.6% [1]. - Spring Airlines experienced a significant capacity increase of 21.1%, maintaining a leading load factor of 91.8% [2]. Pricing and Revenue - Domestic ticket prices turned positive in September, increasing by 3.0% year-on-year, following a decline of 6.5% in July and August [1][4]. - The report anticipates that the improvement in revenue levels will continue into the fourth quarter, supported by a low base and effective revenue management by airlines [4]. Supply Constraints - As of September 2025, the total net addition of passenger aircraft among the major airlines was only 84, reflecting a growth of just 2.7% compared to the end of 2024 [3]. - The tightening of flight schedules is expected to persist, with a projected overall decrease of 1.6% in domestic flight slots for the upcoming winter-spring season [3]. Recommendations - The report emphasizes the potential for profitability in the aviation sector, particularly as oil prices decline, which may alleviate cost pressures for airlines [4]. - Specific stock recommendations include Huaxia Airlines (target price 13.65), Spring Airlines (target price 67.80), and China Southern Airlines (target price 7.35) [9][22].