Core Viewpoint - The International Air Transport Association (IATA) has announced the addition of the Chinese Yuan (RMB) as a settlement currency in its clearing house, marking a significant step forward for RMB internationalization [1][2]. Group 1: RMB as a Settlement Currency - The RMB settlement will be available starting December 2025, following a trial run, providing significant benefits to airlines operating in China by reducing exchange rate risks and simplifying local supplier access [2]. - China Southern Airlines and Xiamen Airlines will be the first to pilot the RMB settlement in November 2025 [4]. - The introduction of RMB settlement is seen as a positive development for the Chinese aviation industry, facilitating faster settlements and lowering costs associated with multiple currency exchanges [4][7]. Group 2: Market Reaction - Following the announcement, airline stocks experienced a notable increase, with Southern Airlines and China National Aviation rising nearly 2%, and Huaxia Airlines increasing over 5% [5]. - The aviation index showed a slight increase of 0.63%, reflecting positive market sentiment towards the new RMB settlement option [6]. Group 3: IATA Clearing House Operations - The IATA Clearing House currently supports seven currencies and provides efficient settlement services for 581 airlines and related enterprises, with a projected settlement amount of $63.8 billion in 2024, including 33 airlines operating in China [6]. - IATA's senior vice president emphasized that the addition of RMB settlement is a crucial step in meeting the demand for cost-effective financial services from member airlines [7]. Group 4: RMB Internationalization - The People's Bank of China (PBOC) highlighted the steady rise of the RMB's international status, noting it is now the largest settlement currency for China's foreign trade and the second-largest trade financing currency globally [8]. - The PBOC has signed 32 effective swap agreements with central banks from various countries, covering major economies across six continents, amounting to approximately 4.5 trillion RMB [8]. - Future plans include building a self-controlled cross-border payment system for RMB and enhancing the efficiency of cross-border RMB clearing services [9].

Market Performance - The aviation and airport sector increased by 1.32% on November 5, with Huaxia Airlines leading the gains [1] - The Shanghai Composite Index closed at 3969.25, up 0.23%, while the Shenzhen Component Index closed at 13223.56, up 0.37% [1] Stock Performance - Huaxia Airlines (002928) closed at 11.07, up 4.14% with a trading volume of 228,800 shares and a turnover of 250 million yuan [1] - HNA Holding (600221) closed at 1.87, up 3.31% with a trading volume of 13,966,000 shares and a turnover of 2.608 billion yuan [1] - Spring Airlines (601021) closed at 55.48, up 2.42% with a trading volume of 8,650 shares and a turnover of 476 million yuan [1] - China National Aviation (601111) closed at 8.26, up 1.98% with a trading volume of 549,400 shares and a turnover of 451 million yuan [1] - China Southern Airlines (600029) closed at 6.94, up 1.17% with a trading volume of 381,400 shares and a turnover of 263 million yuan [1] - Xiamen Airport (600897) decreased by 2.48% to 17.28 with a trading volume of 262,600 shares [2] Capital Flow - The aviation and airport sector experienced a net outflow of 118 million yuan from institutional investors, while retail investors saw a net inflow of 131 million yuan [2][3] - Major stocks like HNA Holding and Huaxia Airlines had mixed capital flows, with HNA Holding seeing a net inflow of 108 million yuan from institutional investors [3] - Retail investors contributed positively to the capital flow in several stocks, including China National Aviation and Shenzhen Airport [3]

Investment Rating - The report maintains a "stronger than market" rating for the transportation industry [6] Core Insights - Crude oil freight rates have significantly increased, with the China Import Crude Oil Composite Index (CTFI) rising to 2425.93 points, up 48.6% from October 23 [2][13] - The three major state-owned airlines in China reported collective profitability in the first three quarters of 2025, with Hainan Airlines becoming the most profitable domestic airline [15][16] - Jitu Express has launched the world's largest self-built logistics hub, which is expected to enhance logistics capabilities during the "Double 11" shopping festival [22][23] Industry Investment Opportunities - Focus on the equipment and manufacturing export chain, recommending companies like COSCO Shipping Specialized, China Merchants Energy Shipping, and Huamao Logistics [4] - Attention to the transportation demand increase driven by the construction of hydropower stations in the Yarlung Tsangpo River downstream, recommending Sichuan Chengyu, Chongqing Port, and Fulimin Transportation [4] - Investment opportunities in the low-altitude economy, recommending CITIC Offshore Helicopter [4] - Opportunities in the highway and railway sectors, recommending Gansu Expressway, Beijing-Shanghai High-Speed Railway, and others [4] - The cruise and water ferry sector presents thematic investment opportunities, recommending Bohai Ferry and Haixia Shares [4] - E-commerce and express delivery investment opportunities, recommending SF Express, Jitu Express, and Yunda Shares [4] - Investment opportunities in the aviation sector, recommending Air China, China Eastern Airlines, Spring Airlines, and others [4] Industry High-Frequency Data Tracking - The Baltic Air Freight Price Index has increased month-on-month, while year-on-year it has decreased [25] - Domestic freight volume for express delivery in September 2025 increased by 12.70% year-on-year, with revenue up by 7.20% [51] - In the first nine months of 2025, the total freight volume at national ports reached 1.3567 billion tons, a year-on-year increase of 4.6% [48]

Core Insights - The aviation and airport sector experienced a decline of 0.53% on November 4, with Huaxia Airlines leading the drop [1] - The Shanghai Composite Index closed at 3960.19, down 0.41%, while the Shenzhen Component Index closed at 13175.22, down 1.71% [1] Stock Performance - Xiamen Airport saw the highest increase, closing at 17.72 with a rise of 6.68% [1] - Other notable performances include Spring Airlines at 54.17 (+1.48%) and Shenzhen Airport at 7.27 (+0.55%) [1] - Major declines were observed in Huaxia Airlines at 10.63 (-1.57%) and Hainan Airlines at 1.81 (-1.09%) [2] Capital Flow - The aviation and airport sector experienced a net outflow of 202 million yuan from institutional investors, while retail investors saw a net inflow of 159 million yuan [2] - The overall capital flow indicates a mixed sentiment, with institutional investors withdrawing funds while retail investors increased their positions [2] Individual Stock Capital Flow - Xiamen Airport had a net outflow of 49.13 million yuan from institutional investors, while retail investors contributed a net inflow of 33.53 million yuan [3] - Huaxia Airlines experienced a net outflow of 12.72 million yuan from institutional investors, with retail investors contributing a net inflow of 7.84 million yuan [3] - Shanghai Airport saw a significant net outflow of 38.15 million yuan from institutional investors, while retail investors had a net inflow of 39.05 million yuan [3]

Group 1 - The core viewpoint of the report is that Minsheng Securities has given Huaxia Airlines (002928.SZ, latest price: 10.56 yuan) a "recommended" rating based on several positive indicators [1] Group 2 - In Q3 2025, the company experienced an increase in revenue through price adjustments, with both capacity and passenger load factor improving year-on-year, although passenger kilometer revenue declined [1] - The recovery in utilization rates and a decrease in oil prices have improved unit costs, and adjustments in fleet structure may still provide room for further cost improvements [1] - The company is continuing to recover from credit impairment losses, which is a positive sign for its financial health [1] - Institutional purchases of capacity are providing a floor for unit revenue during the off-peak season, and the performance of tourism routes during this period is expected to enhance overall unit revenue for the year [1]

Investment Rating - The report maintains a "Recommended" rating for the company, indicating a potential upside of over 15% relative to the benchmark index [5]. Core Insights - The company has shown significant improvement in profitability, with a year-on-year increase in net profit of 102% for the first three quarters of 2025, driven by reduced unit costs and improved load factors [1][2]. - The company is expected to continue benefiting from a favorable operational environment, with unit revenue projected to rise and unit costs to decline, leading to enhanced profit margins [3]. Summary by Sections Financial Performance - For the first three quarters of 2025, the company reported revenues of 5.73 billion yuan, up 11% year-on-year, and a net profit of 620 million yuan, up 102% year-on-year [1]. - In Q3 2025 alone, revenues reached 2.12 billion yuan, a 9.3% increase year-on-year, with net profit at 370 million yuan, reflecting a 32% increase [1]. Cost Management - The unit cost decreased by 4.1% year-on-year in Q3 2025, aided by improved utilization rates and a drop in fuel prices, which fell by 12% year-on-year [2]. - The company has also begun to reverse credit impairment losses, indicating improved cash flow from customers [2]. Revenue Drivers - The company has maintained stable unit revenue despite industry-wide price declines, supported by institutional contracts that insulate it from price fluctuations [3]. - The demand for leisure travel has remained strong, contributing to better-than-expected performance in traditionally low-demand periods [3]. Profit Forecast - The report forecasts net profits of 620 million yuan, 850 million yuan, and 1.13 billion yuan for 2025, 2026, and 2027 respectively, with corresponding growth rates of 129.7%, 38.0%, and 33.6% [4][10]. - The projected earnings per share for the same years are 0.48 yuan, 0.66 yuan, and 0.89 yuan, with price-to-earnings ratios decreasing from 22 in 2025 to 12 in 2027 [4][10].

Core Viewpoint - Huaxia Airlines' stock price has shown a significant increase of 36.34% year-to-date, indicating strong market performance despite a recent decline of 2.04% on November 4 [2][1]. Company Overview - Huaxia Airlines, established on April 18, 2006, and listed on March 2, 2018, is based in Chongqing and primarily engages in domestic and international air passenger and cargo transportation [2]. - The company's revenue composition is heavily weighted towards passenger transport, accounting for 98.46%, with other services and cargo transport making up 1.27% and 0.27% respectively [2]. Financial Performance - For the period from January to September 2025, Huaxia Airlines reported a revenue of 5.734 billion yuan, reflecting a year-on-year growth of 11.25%. The net profit attributable to shareholders reached 620 million yuan, marking a substantial increase of 102.17% [2]. - Cumulatively, the company has distributed 209 million yuan in dividends since its A-share listing, with no dividends paid in the last three years [3]. Shareholder Information - As of September 30, 2025, the number of Huaxia Airlines' shareholders decreased by 4.88% to 21,100, with an average of 60,533 shares held per shareholder, which is an increase of 5.13% [2]. - The top ten circulating shareholders include notable funds, with significant changes in holdings observed among several institutional investors [3].

Core Points - The company announced a share buyback program, with a total of 293,100 shares repurchased as of October 31, 2025, representing 0.0229% of the total shares outstanding [2] Summary by Category Company Actions - The company has initiated a share buyback through a dedicated securities account via centralized bidding [2] - The total number of shares repurchased is 293,100 [2] Financial Impact - The repurchased shares account for 0.0229% of the company's total share count [2]

Core Insights - All seven listed airlines in China reported profits for the third quarter of 2025, with performance growth varying significantly among them [1][2] Group 1: Major Airlines Performance - The three major state-owned airlines (Air China, China Eastern Airlines, and China Southern Airlines) generated over 140 billion yuan in revenue for Q3, a year-on-year increase of over 2%, and net profits exceeding 11 billion yuan, up over 10% [1][3] - For the first three quarters, the three major airlines collectively reported revenues of approximately 373.9 billion yuan, a year-on-year increase of over 2%, and net profits exceeding 6.2 billion yuan, up over 90% [1][3] - China Eastern Airlines achieved a turnaround from losses to profits, while Air China and China Southern Airlines saw net profit increases of over 37% and 17%, respectively [2][4] Group 2: Private Airlines Performance - The four private airlines (Hainan Airlines, Spring Airlines, Juneyao Airlines, and Huaxia Airlines) reported combined revenues of over 35.3 billion yuan for Q3, with a year-on-year increase of over 2%, but net profits dropped by over 4% [1][5] - For the first three quarters, these private airlines generated revenues exceeding 93.4 billion yuan, a year-on-year increase of over 3%, and net profits nearing 6.9 billion yuan, an 8% increase [1][6] - Hainan Airlines reported a significant increase in net profit, while Spring Airlines and Juneyao Airlines experienced declines of over 10% in net profits [4][10] Group 3: Financial Metrics - In Q3, Air China reported revenues of 49.07 billion yuan, with a net profit of 3.68 billion yuan, reflecting a year-on-year decline of 11.31% in net profit [3] - China Eastern Airlines achieved revenues of 39.59 billion yuan and a net profit of 3.53 billion yuan, with a net profit increase of 34.37% [3] - China Southern Airlines reported revenues of 51.37 billion yuan and a net profit of 3.84 billion yuan, marking a 20.26% increase in net profit [3] Group 4: Market Trends and Future Outlook - The aviation market is expected to maintain growth momentum in Q4, driven by increased travel demand during the National Day and Mid-Autumn Festival holidays, with an anticipated 5% year-on-year growth in passenger volume [15] - Hainan Airlines is positioned to benefit from the upcoming full closure of the Hainan Free Trade Port, enhancing its market share in both passenger and cargo transport [10][11] - The competitive landscape remains challenging, with Air China highlighting the impact of non-operational factors such as reduced foreign exchange gains on its profitability [8][9]

Core Points - The meeting aimed to summarize experiences in the ideological and political construction of the pilot workforce and to analyze new challenges, ensuring the integration of party building and business development for high-quality growth in the aviation sector [4][8] - The meeting gathered leaders from 16 major airlines and regulatory bodies in the Southwest region to discuss the foundational and strategic importance of pilot ideological and political construction [4][6] - The meeting emphasized the need for a stable and safe pilot workforce, aligning with the directives from the central government and the Civil Aviation Administration [4][6] Summary by Sections Meeting Objectives - The meeting was convened to discuss the ideological and political construction of the pilot workforce, reflecting on the recent 20th Central Committee's decisions and the transition from the 14th Five-Year Plan to the 15th [4][6] - It served as a concrete action to ensure safety and promote high-quality development in the Southwest aviation sector [4][8] Participant Contributions - Representatives from various airlines shared valuable experiences, practices, and insights regarding the improvement of pilot ideological and political construction [4][5] - The discussions were multi-faceted, providing a broad perspective on existing issues and generating actionable suggestions for future work [4][5] Key Takeaways - The meeting concluded with three main requirements: enhancing party leadership, improving political awareness for winter safety operations, and ensuring the completion of annual tasks [6][7] - A summary of four key opinions was provided, focusing on reviewing progress, addressing existing challenges, setting clear goals, and employing systematic thinking for pilot workforce management [7][8]