Core Viewpoint - Shenzhen is advancing its infrastructure with the commencement of the T2 terminal and North Cargo Area projects at Shenzhen Airport, aimed at enhancing its status as a global economic center and international aviation hub [1][4][12]. Group 1: Project Details - The T2 terminal project is designed to handle an annual passenger throughput of 31 million, featuring a main terminal area of 400,000 square meters and 53 parking positions [4][12]. - The North Cargo Area will significantly increase air cargo capacity by over 1.8 million tons per year, supporting high-end manufacturing and cross-border e-commerce in the Greater Bay Area [12][15]. - Both projects are strategically located to enhance connectivity with existing infrastructure, including rail and road transport systems, facilitating seamless air-rail connections for passengers [5][12]. Group 2: Economic Impact - The development of these projects is expected to inject new momentum into Shenzhen's economy, supporting its transformation into a more globally influential economic center and modern metropolis [1][15]. - The projects align with national and regional development plans, contributing to the construction of a modern logistics system and enhancing Shenzhen's role in the global supply chain [12][15]. - The simultaneous launch of these key projects underscores their importance for the high-quality development of civil aviation in Shenzhen and the broader goal of expanding international openness [15].

Core Insights - Shenzhen Airport is set to add a new terminal, with the T2 terminal area and comprehensive supporting projects officially commencing construction on August 23 [1] - The projects aim to enhance the airport's scale, capacity, operational efficiency, and development space, supporting Shenzhen's position as a composite international aviation hub [1] Project Details - The design capacity of the new terminal is set to accommodate 31 million passengers annually [1] - The T2 terminal will cover a main functional area of 400,000 square meters and include 53 parking positions [1] - Additional facilities will comprise a 30,000 square meter rail transfer center, a 30,000 square meter ground transportation center, and a 143,500 square meter parking garage [1]

Summary of Shenzhen Airport Conference Call Company Overview - **Company**: Shenzhen Airport - **Period**: First half of 2025 Key Financial Performance - **Revenue**: CNY 2.53 billion, up 12.3% year-on-year [2][3] - **Net Profit**: CNY 310 million, up 79.1% year-on-year, marking a record high for the same period since opening [2][3] Passenger and Cargo Operations - **Passenger Growth**: Domestic passenger growth of 9.2%, ranking first among the top ten airports [2][3] - **Total Passenger Volume**: 32.57 million, with a total of 130 domestic routes and 50 international routes [2][3][4] - **Cargo Volume**: 983,000 tons, with a year-on-year increase of 14.1% [3] - **New Routes**: Added domestic routes to Shihezi, Longnan, and others; international routes to Vientiane, Mexico City, and others [2][4][5][6] Future Projections - **Annual Passenger Target**: Aiming for 63 million to 65 million passengers despite summer growth slowdown due to weather [2][7] - **Cross-Border E-commerce Growth**: Expected growth rate of approximately 20%, higher than the overall international market [2][11] Impact of External Factors - **US-China Tariff Impact**: Minimal impact on operations; US cargo accounts for only 10% of total cargo volume [2][8][9] - **Logistics Adjustments**: Diversifying logistics routes to mitigate risks from US tariffs [10] Infrastructure and Capital Expenditure - **Major Projects**: Ongoing construction of a third runway and T2 terminal, with total investment exceeding CNY 10 billion [15][16] - **Logistics Revenue Growth**: Increased by 57% due to the operation of Shenchuang International Cargo Station, contributing CNY 93 million in revenue [12][13] Business Segment Performance - **Leasing and Concession Business**: Low growth, with duty-free business remaining flat due to promotional activities and market conditions [14] - **Advertising Revenue**: Grew by 9% in the first half of 2025, but future growth may be impacted by reduced advertising spending from companies [18] Strategic Partnerships and Operations - **Airline Cooperation**: Preference for concentrated cooperation with major airlines, such as Shenzhen Airlines and China Southern Airlines [24] - **International Route Development**: Continued support for key international routes, with a focus on market sustainability [22][23] Assessment Metrics - **Performance Evaluation**: Focus on financial metrics (revenue, profit) and operational metrics (flight departures, passenger volume) [25]

Group 1 - The successful test flight of the fifth runway at Guangzhou Baiyun International Airport marks a significant milestone for its official operation [1][2] - The test flight lasted 5 hours and 6 minutes, validating various operational aspects including communication, navigation, and runway conditions, all meeting industry standards [2] - The fifth runway, located 1530 meters east of the second runway, is 3600 meters long and 45 meters wide, designed to accommodate large E-class aircraft [2] Group 2 - The total investment for the third phase expansion of Guangzhou Baiyun International Airport is 53.77 billion yuan, which includes the construction of a new T3 terminal and two new runways [2][3] - The expansion aims to enhance the airport's capacity to handle 140 million passengers and over 6 million tons of cargo annually, supporting its development as a comprehensive international aviation hub [3] - Significant progress has been made in the construction of the T3 terminal and other associated facilities, with the project entering the final stages of completion [3]

Core Viewpoint - The opening of the international flight route from Enshi to Hanoi marks a significant step in establishing Enshi as an international aviation hub and enhances its integration into the China-ASEAN development framework [2][3]. Group 1: Flight Route Details - The first international flight, PN6536, from Hanoi to Enshi, landed on June 12, carrying 143 Vietnamese tourists, marking the official opening of the Enshi airport to international flights [1]. - The Enshi-Hanoi route is operated by Western Airlines using an Airbus A320, with flights scheduled every Tuesday, Thursday, and Saturday [1]. Group 2: Economic and Cultural Impact - The new route facilitates deeper cooperation between Enshi and Vietnam, as well as other ASEAN countries, in trade, investment, culture, and tourism [2]. - It provides a "sky corridor" for local businesses to expand internationally and attract external resources, contributing to a more resilient and vibrant China-ASEAN community [2]. Group 3: Future Development Plans - Since the opening of the port, local authorities have been working on enhancing the airport's international capabilities, including upgrading facilities and optimizing services [3]. - Enshi plans to open additional international routes to cities such as Ho Chi Minh City, Bangkok, Seoul, Busan, and Cheongju, aiming to establish a comprehensive international air transport network [3].

Industry Overview and Classification System - The airport industry is a core infrastructure of the comprehensive transportation system in China, characterized by its strategic and public service nature, with construction and fees strictly regulated by the Civil Aviation Administration of China (CAAC) [1][6] - As of the end of 2024, there are 263 civil transport airports in China, classified into three categories based on traffic volume: Class 1 Level 1 (Beijing Capital, Shanghai Pudong, Guangzhou), Class 1 Level 2 (Shenzhen, Chengdu, Shanghai Hongqiao), and Class 2 (20 airports including Kunming, Chongqing) [1][6][7] - Airport revenue is divided into aviation-related (public service) and non-aviation-related (profit-generating) businesses [1][6] Policy Environment and Development Direction - Industry policies focus on optimizing fee mechanisms and hub construction, maintaining government-guided prices for aviation-related services while gradually marketizing non-aviation services to improve revenue structure [2][8] - The "3+7+N" international aviation hub system aims to enhance international transfer capabilities and freight functions, with plans to be basically formed by 2025 and fully completed by 2035 [2][9] - Revised subsidy policies for regional aviation focus on supporting the development of small and medium airports [2][9] Industry Operation and Regional Characteristics - In 2024, the industry fully recovered, with passenger throughput reaching 1.46 billion (up 15.9%), cargo throughput at 20.06 million tons (up 19.2%), and takeoff and landing operations at 12.40 million (up 5.9%), all exceeding 2019 levels, although international passenger traffic recovered to only 71.2% of 2019 levels [3][13][18] - The eastern region leads in airport performance due to economic and population advantages, with key airport clusters contributing to 50.74% of national passenger throughput and 69.62% of cargo throughput [3][21] Supply and Demand Structure and Competitive Landscape - The "14th Five-Year Plan" aims to increase the number of airports to 270, with fixed asset investment of 135 billion yuan in 2024, and major expansion projects in airports like Guangzhou Baiyun and Wuhan Tianhe [3][25][26] - The demand for domestic travel and air logistics remains strong, with the recovery of international routes and the "air-rail intermodal" model mitigating high-speed rail diversion effects [3][25] - The industry exhibits a regional monopoly structure, with competition being mild due to differences in economic hinterland and functional positioning [3][25][31] Future Outlook - The industry benefits from the "14th Five-Year" civil aviation development plan, indicating a rapid growth phase, with stable rating outlooks [3][33] - Domestic passenger and cargo transport is expected to grow steadily, while international passenger recovery continues [3][33] - Capacity expansion and airspace optimization will support long-term development, with further marketization of non-aviation businesses enhancing profit potential [3][33]

Group 1: Recent Operational Performance - As of April 2025, Shenzhen Airport achieved a domestic passenger throughput of 19.83 million, representing a year-on-year increase of 8.01% [1] - The domestic cargo and mail throughput reached 298,500 tons, with a year-on-year growth of 6.85% [1] - The total passenger throughput for Shenzhen Airport was 21.87 million, marking a 10.03% increase year-on-year, including international passenger throughput of 1.89 million, which grew by 37.74% [2] Group 2: Future Development and Capacity Planning - Shenzhen Airport has no significant capital expenditure plans currently, focusing on leveraging its developed route network and operational resources [2] - Future plans include establishing a structure of "three runways, three terminal areas, three cargo areas, and one satellite hall" to enhance its role as a comprehensive international transportation hub [2] Group 3: Commercial Revenue and Business Operations - The rapid growth in passenger throughput has led to steady improvements in commercial operations, with the introduction of 15 international luxury brands and 9 new projects [2] - Shenzhen Airport aims to enhance non-aeronautical revenue by optimizing advertising placements and adjusting duty-free shop locations [2] Group 4: Regional Competition and Cooperation - Shenzhen Airport is strategically located in the core of the Guangdong-Hong Kong-Macao Greater Bay Area, serving as a hub for domestic and international connections [3] - The airport will leverage its market advantages to develop a route network that aligns with local city functions, catering to the travel needs of passengers in Shenzhen and surrounding areas [4]

Investment Rating - The airport industry is rated with a stable outlook, indicating a positive long-term growth potential supported by government policies and infrastructure investments [34]. Core Insights - The airport industry is a crucial part of China's transportation infrastructure, with 263 civil transport airports as of the end of 2024, reflecting a net increase of 4 airports from the previous year [4][10]. - The revenue structure of airport operations is divided into aviation-related income, which is quasi-public, and non-aviation income, which is market-driven, allowing for improved profitability [5][6]. - The industry is experiencing a robust recovery in operational metrics, with passenger throughput exceeding pre-pandemic levels, although international passenger traffic has not fully recovered [10][14]. Industry Overview - The airport industry is characterized by strategic importance and public service, with strict management by the Civil Aviation Administration of China [4]. - The revenue from aviation-related services includes essential operations such as takeoff and landing fees, while non-aviation services encompass various commercial activities [5]. - The industry is undergoing a transformation with the gradual marketization of non-aviation service fees, enhancing the revenue structure and competitive edge of airport operators [6]. Policy Environment - Recent policies, such as the "Guidance on Promoting International Aviation Hub Construction," aim to enhance the functionality of international aviation hubs and improve operational efficiency [7][9]. - The "14th Five-Year Plan" outlines a target to increase the number of civil transport airports from 241 to at least 270 by 2025, indicating significant growth potential [8][27]. - The government continues to support the industry through subsidies and funding for infrastructure projects, which is crucial for the sector's recovery and expansion [8][30]. Operational Performance - In 2024, the airport industry saw a significant recovery, with passenger throughput increasing by 15.9% year-on-year, surpassing 2019 levels [10][14]. - The total revenue for airport enterprises reached 1136.7 billion yuan, marking an 8.5% increase from the previous year, while the total profit showed a substantial reduction in losses [26]. - The operational metrics indicate a strong recovery trajectory, with domestic passenger traffic growing by 12.2% compared to 2019, while international traffic is still recovering [16][18]. Supply and Demand Dynamics - The airport industry has substantial growth potential, driven by ongoing fixed asset investments and improvements in flight capacity [27][28]. - The demand for air travel is expected to continue rising, supported by economic recovery and increased consumer spending [30]. - The competitive landscape is characterized by regional monopolies, with airports facing limited competition due to geographical and regulatory constraints [32][33]. Future Development - The airport industry is positioned for rapid growth, with ongoing investments in infrastructure and a clear policy framework supporting its expansion [34]. - The recovery of domestic and international travel demand is anticipated to sustain the industry's growth momentum in the coming years [34].

Core Insights - Chengdu has become the fifth city in China to join the "million-ton club" for air cargo, with a significant increase in cargo throughput in the first quarter of this year, reaching 270,000 tons, a year-on-year growth of 24.5% [1][3] - The development of Chengdu's international air cargo hub is supported by strategic collaborations with airlines and logistics companies, focusing on enhancing air cargo capacity and efficiency [2][4] - The establishment of new international cargo routes, including direct flights to Amsterdam, Chicago, and Paris, has strengthened Chengdu's position in the global supply chain [3][4] Group 1: Cargo Volume and Growth - Chengdu's international air cargo hub achieved a throughput of 270,000 tons in Q1 2023, marking a 24.5% increase compared to the previous year [1][3] - The dual airport strategy, involving Shuangliu and Tianfu airports, has led to a combined cargo throughput of 170,000 tons at Shuangliu Airport, with a year-on-year growth of 24.9% [4] - Tianfu Airport recorded a cargo throughput of 100,000 tons in Q1 2023, reflecting a growth of 23.9% [5] Group 2: Infrastructure and Capacity Development - The Sichuan Airport Group is enhancing air cargo capacity by collaborating with major airlines and logistics providers to develop an efficient air cargo network [2][4] - The new Tianfu International Airport express center is set to enhance cargo handling capabilities, with a total processing capacity of 2.8 million tons annually [2] - The introduction of advanced logistics solutions, such as the "import airside transfer" model, has significantly improved cargo transfer efficiency [7] Group 3: Policy Support and Strategic Initiatives - The local government has prioritized air cargo development as a key initiative for economic growth, providing substantial policy support [2] - Chengdu Customs has implemented a 24/7 clearance mechanism, facilitating faster processing of perishable goods and enhancing the overall logistics environment [8] - The focus on cross-border e-commerce has led to an increase in the volume of imported goods, including a notable rise in the import of fresh salmon [8]

Group 1: Future Development and Capital Expenditure - Shenzhen Airport aims to establish itself as a world-class international aviation hub, focusing on clear positioning and competitive advantages [1] - The company plans to expand flight routes to major global cities and enhance logistics operations, particularly with e-commerce partners [1][2] - There are currently no significant capital expenditure plans [2] Group 2: Passenger Traffic Recovery and Growth Potential - As of April 2025, Shenzhen Airport recorded 147,700 flight takeoffs and landings, a year-on-year increase of 5.82% [2] - Passenger throughput reached 21.87 million, reflecting a 10.03% year-on-year growth [2] - The airport will continue to promote international connectivity and support local airlines in expanding their reach [2] Group 3: Dividend Outlook - The company has committed to distributing no less than 45% of its distributable profits as cash dividends annually from 2023 to 2025 [2] - For the fiscal year 2024, a cash dividend of 1.2 RMB per 10 shares is proposed, totaling 246 million RMB, with a dividend payout ratio of 55.55% [2] Group 4: Concession Business Outlook - Shenzhen Airport is actively monitoring regulatory developments regarding concession operations and aims to expand its concession business [4] - The company plans to transition from an operational airport to a management-focused airport, enhancing ground service efficiency [4]