Core Insights - The report highlights the emergence of a commodity bull market driven by anti-involution policies and increased infrastructure investment, which are expected to positively impact upstream supply chains and commodity prices [5][15][61] - The transportation sector has shown mixed performance, with the public transport sub-sector leading with an 11.1% increase, while the aviation sub-sector lagged with a -6.7% decline [5][13] - The report emphasizes the growing concentration in the bulk supply chain market, with the CR4 market share rising from 1.21% in 2016 to 4.18% in 2022, indicating a trend towards larger, more stable companies benefiting from the anti-involution policies [5][33] Market Overview - As of July 28, 2025, the Shanghai Composite Index closed at 4135.82, up 5.1% year-to-date, while the CITIC Transportation Index underperformed at 2061.14, up only 1.1% [7][9] - The report notes that the overall market for bulk supply chain services in China was approximately 55 trillion yuan in 2022, with a significant increase in market concentration observed [5][25][33] Investment Recommendations - The report suggests focusing on midstream logistics and warehousing companies like Wuchan Zhongda (600704.SH) to capitalize on the anticipated recovery in commodity prices and demand [5][61] - It also recommends monitoring leading dry bulk shipping companies such as China Merchants Energy Shipping (601872.SH) and Haitong Development (603162.SH) as shipping demand is expected to rebound [5][61] Commodity Price Trends - Since July 1, 2025, major commodity prices have rebounded significantly, with DCE coking coal prices rising by 54.6%, iron ore by 13.3%, and soda ash by 23.6% [22][23] - The report indicates that the anti-involution policies are likely to stabilize commodity prices and improve profitability for leading supply chain companies [22][38] Supply Chain Dynamics - The report highlights the increasing importance of long-distance transportation for iron ore imports, particularly from Brazil and Guinea, which is expected to drive up shipping demand due to longer transport distances [44][52] - The growth trend in aluminum ore imports is also noted, with a significant increase in dependency on foreign sources, particularly from Guinea [56][59] Company Performance and Projections - Wuchan Zhongda is projected to achieve a revenue of approximately 620.4 billion yuan in 2025, with a net profit of around 3.67 billion yuan, reflecting a strong growth trajectory [66][68] - China Merchants Energy Shipping is expected to benefit from a recovering market, with projected net profits of 5.9 billion yuan in 2025, indicating a robust operational capacity [70][72] - Haitong Development is anticipated to see a rebound in profits as market conditions improve, with projections of 263.66 million yuan in net profit for 2025 [73][76]