Core Viewpoint - The launch of the direct flight route from Chengdu to Almaty marks a significant development in air travel connectivity between Southwest China and Kazakhstan, enhancing tourism and trade opportunities in the region [1] Group 1: Flight Details - The CA455 flight from Chengdu Tianfu International Airport took off on December 30, 2025, at 18:30 and arrived at Almaty International Airport at 20:01 local time after a flight duration of 4 hours and 30 minutes [1] - This route is the first direct flight from Southwest China to Kazakhstan, with flights scheduled every Tuesday and Saturday [1] - The return flight, CA456, departs from Almaty at 21:30 local time and arrives back in Chengdu at 4:30 the next day, utilizing an Airbus A320 aircraft [1] Group 2: Significance of Almaty - Almaty is the largest city in Kazakhstan and serves as a major hub for road transport and international air travel [1] - Key attractions in Almaty include the Chimbulak Ski Resort and the Big Almaty Lake, which are expected to draw tourists from China [1]

Core Viewpoint - The three major Chinese airlines, China Eastern Airlines, China Southern Airlines, and Air China, announced a new fuel surcharge standard for domestic flights effective from January 5, 2026, with specific rates for different flight distances and exemptions for certain passenger categories [1][4][6]. Group 1: Fuel Surcharge Standards - For domestic flights under 800 kilometers, the fuel surcharge will be set at RMB 10 per passenger, while for flights over 800 kilometers, the surcharge will be RMB 20 per passenger [1][4][6]. - Infants traveling on adult tickets will be exempt from the fuel surcharge, while children, disabled veterans, and police officers injured in the line of duty will have reduced rates, with no charge for flights under 800 kilometers and RMB 10 for flights over 800 kilometers [1][4][6]. Group 2: Ticket Change Policy - Tickets sold before January 5, 2026, will not have the fuel surcharge refunded or adjusted if changes are made after this date [2][4].

Summary of Key Points from Conference Call Industry Overview - The focus is on the aviation sector, particularly in the context of the appreciation of the Renminbi (RMB) and its impact on various industries including airports and light industry paper manufacturing [1][3]. Core Insights and Arguments - The appreciation of the RMB is expected to enhance the financial performance of sectors like aviation and light industry paper due to improved cost and debt structures [1][3]. - Historical data indicates that different sectors lead the market during phases of rapid RMB appreciation, with core assets leading in 2017, new energy and military industries in 2020-2021, and economic recovery valuation logic in late 2022 to early 2023 [1][6]. - The current phase of RMB appreciation differs from previous ones, with reduced foreign capital influence and increased domestic pricing power, shifting market focus towards technological transformation rather than mere economic recovery [1][7]. - The aviation sector is highlighted as a key beneficiary, with significant cost components (over 60%) being dollar-denominated, meaning even slight RMB appreciation can lead to substantial profit increases [3][9]. Investment Opportunities - Short-term investment opportunities are identified in the aviation and light industry paper sectors, particularly as companies prepare to release annual reports [1][8]. - The second tier of investment opportunities includes foreign-invested blue-chip stocks such as electric equipment, electronics, and food and beverage sectors, which have shown resilience during past RMB appreciation phases [5]. - The third tier includes large financial and real estate sectors, which have a high proportion of RMB-denominated assets, benefiting from balance sheet improvements during RMB appreciation [5]. Additional Important Insights - The global aircraft manufacturing industry is facing supply chain bottlenecks due to de-globalization, affecting the availability of materials and components [11]. - The performance of Chinese airlines has significantly outpaced the Shanghai and Shenzhen 300 index, driven by increased international route demand and favorable pricing dynamics [12]. - Airlines like China Southern, China Eastern, Air China, and budget carriers such as Spring Airlines are identified as high-elasticity investment opportunities due to their potential recovery from historical lows [3][12]. - The upcoming delivery of new aircraft orders (e.g., Spring Airlines and Juneyao Airlines) is expected to support fleet updates and future growth [10].

Core Insights - Multiple domestic airlines in China have signed agreements with Airbus to purchase a total of 148 A320 series aircraft, indicating strong demand for narrow-body planes in the market [2][5]. Group 1: Aircraft Orders - Air China and its subsidiary signed a purchase agreement for 60 A320neo aircraft, with a total catalog price of approximately $9.53 billion, scheduled for delivery between 2028 and 2032 [3]. - Huaxia Airlines ordered 3 A320 series aircraft, expected to be delivered over three years starting in 2030, pending government approval [3]. - Spring Airlines and Juneyao Airlines announced orders for 30 and 25 A320neo aircraft, respectively, with delivery planned between 2028 and 2032 [3]. - China Aircraft Leasing Company also signed an agreement for 30 A320neo aircraft, with deliveries planned before 2033 [4]. Group 2: Market Trends - Airbus has seen a significant increase in orders from China, with a market share expected to exceed Boeing's, reaching 55% by 2025 [5]. - The demand for narrow-body aircraft is rising, with older models like A320CEO and B737NG decreasing by 10% and 8.4%, while new models A320neo and B737max have surged by 286.3% and 97.9% respectively [8]. - The introduction of wide-body aircraft has stagnated, with only a net increase of 4 aircraft from 2019 to 2025, largely due to slow recovery in international routes [9]. Group 3: Operational Challenges - Airlines are facing operational challenges due to engine shortages, leading to increased grounded aircraft and delayed new deliveries [7]. - The International Air Transport Association reported over 5,000 grounded aircraft, the highest level historically, exacerbated by trade tensions affecting supply chains [7]. - Despite the operational challenges, the current tightness in capacity has somewhat alleviated the oversupply in the domestic market [7].

Core Viewpoint - Multiple domestic airlines in China have signed significant aircraft purchase agreements with Airbus, totaling 148 A320 series aircraft, indicating a strong demand for narrow-body planes despite current market challenges [3][8]. Group 1: Aircraft Orders - China National Airlines and its subsidiary signed an agreement to purchase 60 A320neo aircraft, with a total list price of approximately $9.53 billion, scheduled for delivery between 2028 and 2032 [5]. - Spring Airlines and Juneyao Airlines announced orders for 30 and 25 A320neo aircraft, respectively, with total prices of up to $4.128 billion and approximately $4.1 billion, to be delivered from 2028 to 2032 [6]. - China Aircraft Leasing Company ordered 30 A320neo aircraft, with deliveries planned before 2033 [7]. Group 2: Market Dynamics - Airbus has secured a total of 148 aircraft orders from China in a short period, reflecting a growing trend of large orders from Chinese airlines [8]. - By 2025, Airbus is expected to hold a market share of over 55% in China, making it the largest single-country market for the company [9]. - The global second-largest aircraft leasing company, Avolon, indicated that popular aircraft models like the Boeing 737 MAX and Airbus A320neo are sold out by 2030, highlighting strong demand [9]. Group 3: Operational Challenges - The recent aircraft orders may be a strategic move to secure aircraft availability and mitigate operational challenges caused by engine shortages, which have led to increased grounded aircraft [11]. - The International Air Transport Association reported that over 5,000 aircraft are currently grounded, the highest level in history, exacerbated by supply chain issues due to U.S.-China trade tensions [11]. - Despite the current overcapacity in the domestic market, the introduction of new aircraft is slowing, with the fleet size growing at a compound annual growth rate of 2.6% from 2019 to 2025 [12]. Group 4: Aircraft Type Trends - The introduction of wide-body aircraft has nearly stagnated, with only a net increase of 4 aircraft from 2019 to 2025, primarily due to slow recovery in international routes [13]. - The domestic market is seeing a shift towards narrow-body aircraft, with significant increases in new models like the A320neo and B737 MAX, while older models are being phased out [12][13]. - The share of domestic aircraft in the fleet has increased from 1.3% in 2019 to 4.5%, indicating a growing presence of domestic manufacturers in the narrow-body market [13].

Core Insights - Airbus has secured a significant order for 148 narrow-body aircraft from multiple Chinese airlines, indicating strong demand in the narrow-body segment [1][5]. Group 1: Aircraft Orders - China National Airlines and its subsidiary signed a purchase agreement for 60 Airbus A320neo aircraft, with a total catalog price of approximately $9.53 billion, scheduled for delivery between 2028 and 2032 [2]. - Huaxia Airlines ordered 3 A320 series aircraft, while Spring Airlines and Juneyao Airlines ordered 30 and 25 A320neo aircraft, respectively, with deliveries planned from 2028 to 2032 [3]. - China Aircraft Leasing Company also signed an agreement for 30 A320neo aircraft, with deliveries expected before 2033 [4]. Group 2: Market Dynamics - Airbus's market share in China is projected to exceed Boeing's, reaching 55% by 2025, making China Airbus's largest single-country market for several consecutive years [6]. - The global second-largest aircraft leasing company, Avolon, indicated that models like Boeing 737 MAX and Airbus A320neo are expected to be sold out by 2030, highlighting the demand for these narrow-body aircraft [6]. Group 3: Production Capacity - To meet increasing demand, Airbus is enhancing its production capacity by activating a second A320 assembly line in Tianjin, aiming for a monthly production target of 75 A320 aircraft by 2027 [7]. Group 4: Industry Challenges - The recent aircraft orders may be a strategic move by Chinese airlines to secure aircraft availability and mitigate operational challenges caused by engine issues, which have led to temporary groundings [8]. - Despite a shortage of new aircraft, over 5,000 grounded planes represent a historical high, exacerbated by trade tensions affecting supply chains and increasing maintenance costs [8]. - The domestic market is experiencing a slowdown in fleet growth, with a projected fleet size of 4,180 aircraft by the end of 2025, reflecting a compound annual growth rate of 2.6% since 2019 [8]. Group 5: Aircraft Composition - The narrow-body aircraft segment is seeing a shift, with older models like A320 CEO and B737 NG decreasing by 10% and 8.4%, while new models like A320neo and B737 MAX have surged by 286.3% and 97.9% respectively [9]. - The introduction of wide-body aircraft has stagnated, with only a net increase of 4 aircraft from 2019 to 2025, largely due to slow recovery in international routes [10]. - Domestic airlines are accelerating the retirement of older wide-body aircraft, focusing on acquiring narrow-body models, which explains the recent orders being exclusively for narrow-body aircraft [10].

Core Insights - The aviation and airport sector experienced a significant increase of 3.31% on December 31, with Juneyao Airlines leading the gains [1] - The Shanghai Composite Index closed at 3968.84, up 0.09%, while the Shenzhen Component Index closed at 13525.02, down 0.58% [1] Stock Performance - Juneyao Airlines (603885) closed at 14.88, up 7.20%, with a trading volume of 405,100 shares and a transaction value of 588 million yuan [1] - China Eastern Airlines (600115) closed at 6.00, up 5.82%, with a trading volume of 1,607,700 shares and a transaction value of 948 million yuan [1] - Southern Airlines (600029) closed at 8.01, up 4.57%, with a trading volume of 991,400 shares and a transaction value of 782 million yuan [1] - Air China (601111) closed at 9.37, up 3.31%, with a trading volume of 1,991,300 shares and a transaction value of 921 million yuan [1] - Spring Airlines (601021) closed at 59.50, up 3.30%, with a trading volume of 68,800 shares and a transaction value of 404 million yuan [1] Capital Flow - The aviation and airport sector saw a net inflow of 185 million yuan from institutional investors, while retail investors experienced a net outflow of 209 million yuan [2] - The net inflow from speculative funds was 23.96 million yuan [2] Individual Stock Capital Flow - Hainan Airlines (600221) had a net inflow of 104 million yuan from institutional investors, but a net outflow of 22.42 million yuan from retail investors [3] - China Eastern Airlines (600115) saw a net inflow of 54.73 million yuan from institutional investors, with a net outflow of 73.04 million yuan from retail investors [3] - Air China (601111) had a net inflow of 46.63 million yuan from institutional investors, while retail investors experienced a net outflow of 77.78 million yuan [3] - Southern Airlines (600029) recorded a net inflow of 18.42 million yuan from institutional investors, with a net outflow of 40.39 million yuan from retail investors [3]

Market Overview - The A-share market closed with mixed performance on December 31, 2025, with the Shanghai Composite Index slightly up while other indices like the Shenzhen Component and ChiNext Index saw minor declines, and total market turnover decreased to 2.07 trillion yuan [1] - The Shanghai Composite Index recorded an annual increase of 18.41%, marking the largest annual gain in six years [2] Sector Performance - Sectors such as aerospace equipment, airport services, hotel and catering, and artificial intelligence showed strong gains, while forestry, chemical fiber, consumer electronics, and photovoltaic equipment experienced declines [3] - Notably, the commercial aerospace stock Daye Co., Ltd. (603278) hit a trading limit with a six-day consecutive rise, achieving a transaction volume exceeding 1.9 billion yuan [3] Capital Flow - The defense and military industry attracted over 16 billion yuan in net inflows, while the computer and media sectors saw net inflows of over 7.6 billion yuan and 6.8 billion yuan, respectively. Conversely, the electronics sector faced a net outflow exceeding 11.9 billion yuan [3] Future Market Outlook - Debon Securities suggests that the market may continue a slow upward trend, supported by sufficient liquidity and a growing financing balance exceeding 2.5 trillion yuan, alongside potential foreign capital inflows due to the USD/CNY exchange rate breaking 7 [4] - Huolong Securities anticipates a continuation of the slow bull market, driven by ongoing proactive fiscal policies and moderate monetary easing, with a focus on sectors like artificial intelligence, commercial aerospace, and humanoid robots [4] Airline Sector Insights - The airline sector saw a significant increase, with the index rising 3.32%, reaching a two-and-a-half-year high, driven by strong performance from airlines like China Eastern Airlines and Air China [4] - Data indicates a year-on-year increase of approximately 28% in domestic flight ticket bookings for the New Year holiday, with outbound and inbound bookings also showing growth [4] Ticket Pricing Trends - Average ticket prices for economy class during the New Year holiday are projected to be 669 yuan (excluding tax), reflecting an 8.2% increase compared to the previous year [5] - Guosen Securities predicts that the airline sector may experience a second wave of growth as the Spring Festival approaches, contingent on ticket price performance exceeding expectations [5] Aerospace Sector Developments - Following the introduction of new listing rules for commercial rocket companies, aerospace equipment stocks have surged, with the sector index rising 9.35% to a historical high [5] - The successful testing of reusable rockets is seen as a pivotal moment for the industry, potentially resolving capacity issues and enhancing satellite networking capabilities [5]

Market Performance - On December 31, major indices showed volatility, with the Shanghai Composite Index slightly up by 0.09%, while the Shenzhen Component Index fell by 0.58%, the ChiNext Index dropped by 1.23%, and the STAR Market 50 Index decreased by 1.15% [2] - Over 2,300 stocks in the two markets were in the green, with a total trading volume reaching approximately 2.05 trillion yuan [2] AI and Technology Sector - AI application concept stocks led the gains, with BlueFocus (300058.SZ) rising by 20%, iReader Technology (603533.SH) increasing by 10%, and Century Tianhong (300654.SZ) and Chinese Online (300364.SZ) experiencing significant increases [2] - Meta announced the acquisition of the general AI agent platform Manus, marking its third-largest acquisition to date. Manus has processed over 147 trillion tokens and created 80 million virtual computers, serving millions of users [2] Aerospace Sector - The commercial aerospace concept remained active, with Aerospace Universe (688523.SH) rising over 14%, and China Satellite (600118.SH) and Aerospace Development (000547.SZ) both increasing by 10% [2] - On December 31, China successfully launched the Practice-29 satellite using the Long March 7 modified carrier rocket, marking the 623rd flight of the Long March series and a record 73 space launch missions completed in 2025 [3] Aviation and Education Sector - The airport and shipping sector strengthened, with companies like Juneyao Airlines (603885.SH) up by 7.2%, and China Eastern Airlines (600115.SH), China Southern Airlines (600029.SH), and Air China (601111.SH) also seeing gains [4] - The upcoming New Year holiday is expected to drive a surge in passenger traffic, with the Civil Aviation Administration predicting a 4.9% year-on-year increase in passenger throughput from January 1 to 3, 2026 [4] - The education sector also performed well, with Kevin Education (002659.SZ) hitting the daily limit up by 10%, and other companies like Zhonggong Education (002607.SZ) and Dou Shen Education (300010.SZ) showing significant increases [4] - The Ministry of Education plans to advance AI in education, with policies expected to be released next year to promote AI knowledge education and develop a future-oriented education system [4] Declining Sectors - The liquor and pharmaceutical commercial sectors weakened, with companies like Hefei China (603122.SH), Kweichow Moutai (600519.SH), and Gujing Gongjiu (000596.SZ) experiencing declines [5] - The chip and lithium battery sectors also faced downturns, with Saiwei Electronics (300456.SZ) dropping by 9.96%, and other companies like Cambrian (688256.SH), EVE Energy (300014.SZ), and CATL (300750.SZ) also declining [5]

Core Viewpoint - The recent trend of concentrated aircraft purchases in the domestic aviation industry highlights airlines' focus on long-term capacity enhancement and structural optimization, with major airlines like China National Aviation, Juneyao Airlines, and Huaxia Airlines planning to acquire Airbus A320 series aircraft for delivery between 2028 and 2032 [1][2]. Group 1: Aircraft Purchases - China National Aviation plans to purchase 60 Airbus A320NEO series aircraft at a catalog price of approximately $9.53 billion, with deliveries scheduled from 2028 to 2032 [1]. - Juneyao Airlines intends to sign an agreement to purchase 25 Airbus A320 series aircraft, pending national approval, with deliveries also planned between 2028 and 2032 [1]. - Huaxia Airlines has announced plans to sign an A320 series aircraft procurement agreement for 3 aircraft, with deliveries expected to start in 2030 and completed within three years [1]. Group 2: Aircraft Specifications and Market Position - The A320 series is recognized as one of the best-selling single-aisle narrow-body aircraft globally, known for its efficiency, advanced technology, and reliability, suitable for domestic trunk routes and short to medium-haul international flights in Asia [2]. - The A320NEO series features new engines and sharklet wing designs, improving fuel efficiency by 15% to 20% compared to older models, while also reducing noise emissions and extending range by 500 to 900 kilometers, making it a preferred choice for airlines updating their fleets [2]. - Airbus predicts that over the next 20 years, the Chinese civil aviation market will require more than 9,500 aircraft, accounting for about one-fifth of global demand, supported by a strong operational foundation for the A320 series in the domestic market [2]. Group 3: Industry Context - The concentrated aircraft purchases reflect a broader trend of domestic airlines increasing their long-term capacity, supported by steady growth in the civil aviation market [3]. - Data from the Civil Aviation Administration of China indicates that from January to November 2025, the aviation industry achieved a total transport turnover of 1,502.6 billion ton-kilometers and a passenger transport volume of 710 million, with international route turnover and passenger transport growth rates exceeding 20%, providing a solid basis for airlines' long-term capacity planning [3].