HTSC·2025-05-08 02:25Investment Rating - The report maintains an "Overweight" rating for the transportation sector [7]. Core Views - The report recommends focusing on the improving supply-demand dynamics in the aviation, oil shipping, and highway sectors while advising caution in container shipping, cross-border logistics, express delivery, and railways [1]. Aviation - The aviation sector is expected to benefit from a slowdown in supply growth, with demand for domestic and international flights increasing by 1.7% and 26.9% respectively in March [2][14]. - The report highlights that the overall passenger load factor remains high at 83.3%, with a notable reduction in the year-on-year decline of ticket prices [14][17]. - Recommended stocks include China National Aviation, China Eastern Airlines, and Huaxia Airlines, which are expected to benefit from the improving market conditions [29]. Airports - Airports have seen a steady increase in passenger traffic, with Shanghai's two airports experiencing a 7.5% year-on-year increase in passenger throughput in Q1 2025 [30]. - The report emphasizes the need for airports to enhance their non-aeronautical revenue streams to improve profitability [30][34]. Shipping and Ports - The report notes that the international freight market has been volatile due to tariff policies, with expectations of a decline in container volumes in April and May [3][37]. - Oil shipping rates are projected to improve in May due to OPEC+ production increases, while refined oil shipping rates may remain stable [39]. Highways - The highway sector demonstrated strong performance in Q1 2025, with a notable increase in net profits, making it a favorable sector for dividend plays [4]. - The report suggests that the current low interest rates and risk-averse sentiment support the valuation of dividend-paying stocks in this sector [4]. Logistics and Express Delivery - The express delivery sector is facing intensified price competition, with a significant year-on-year increase in parcel volume but a corresponding decline in average prices [5][61]. - The report advises caution regarding franchise-based express delivery companies while maintaining a positive long-term outlook for well-capitalized and service-oriented leaders in the sector [5][61].