Investment Rating - The industry rating is "Outperform" [1] Core Insights - Aircraft manufacturers are slowly recovering their production capacity, but the backlog of aircraft orders remains at a historically high level. In January 2026, Boeing delivered 46 aircraft, while Airbus delivered 19. IBA predicts that Airbus will deliver slightly more than 900 aircraft in 2026, and Boeing is expected to deliver around 670 aircraft for the year. The demand for aircraft orders continues to be strong, with backlog levels remaining high [2][7][8]. - The secondary aircraft trading market has been strengthening since the pandemic's impact has diminished. Narrow-body aircraft, particularly the Airbus A320/A321 series and Boeing 737NG series, dominate the market. Demand comes from existing operators, as well as from dismantling traders and spare parts suppliers. The market value and rental levels for wide-body aircraft are also on the rise, driven by high engine overhaul costs and a shortage of maintenance slots. Despite limited availability of aircraft and engines for sale, the overall aircraft trading market is expected to remain strong [2][41]. - Overall, while aircraft manufacturers' production capacity has improved, it still struggles to meet the ongoing demand for aircraft. The aircraft leasing industry is expected to benefit from the tight supply-demand dynamics. The Asia-Pacific aviation market has significant growth potential, providing broader development space for Chinese aircraft leasing companies. Compared to global leasing leader AerCap, Chinese leasing companies are currently undervalued and possess higher order elasticity, making them worthy of attention [2]. Summary by Sections 1. Aircraft Supply Continues to be Tight - Aircraft manufacturers are facing production constraints due to supply chain issues and labor shortages, leading to delivery delays. The backlog of orders remains high, with a total of 15,560 aircraft orders as of the end of January 2026 [2][8]. 2. Civil Aviation Passenger Demand Update - Global aviation passenger traffic growth has slowed, with a year-on-year increase of 5.6% in December 2025, slightly down from 5.8% in November. The load factor was 83.7%, a slight decrease from 83.9% in December of the previous year [13][17]. - International routes are showing steady growth, with international passenger RPK increasing by 7.7% year-on-year in December 2025. The Asia-Pacific region's international passenger traffic remains strong, with a year-on-year growth of 7.5% [20]. 3. Aircraft Leasing Company Dynamics - As of June 30, 2025, Bohai Leasing has the highest number of owned aircraft (628), while China Aircraft Leasing has the least (151). In terms of aircraft orders, Bohai Leasing also leads with 442 orders [39][45]. - The average remaining lease term for China Aircraft Leasing is relatively long at 7.9 years, ensuring long-term stability for the company's leases [48].

Group 1 - The core viewpoint is that the summer and National Day peak seasons are driving a continuous recovery in air travel demand, supported by visa-free policies and a strong recovery in international routes, particularly in East and South China airports [1][2][4] - During the summer travel period of 2025, the total number of civil aviation flights in China reached 1.054 million, a year-on-year increase of 3.2%, with domestic flights increasing by 2.0% and international flights by 13.2% [1][2] - The passenger transport volume during the National Day holiday reached approximately 19.17 million, a year-on-year increase of 3.4%, with a total of 135,000 flights, up 3.3% compared to the previous year, and a 15.1% increase compared to 2019 [1][2] Group 2 - Major listed airports showed a steady recovery in production, with significant improvements in passenger throughput, particularly at Pudong, Baiyun, Shenzhen, and Capital airports, which saw year-on-year increases of 10.0%, 8.2%, 8.8%, and 3.9% respectively [1][2] - The winter-spring flight schedule for 2025 indicates a slight overall contraction in capacity, with a 1.16% year-on-year decrease in total flight slots, while major airports maintained stable performance with domestic and international slots increasing by 6.18% and 7.07% respectively [3] - Investment recommendations suggest focusing on airports with a high proportion of international routes and potential for transfer traffic, such as Shenzhen Airport and Shanghai Airport, as the industry experiences a steady increase in prosperity [4]

Core Viewpoint - The report from GF Securities indicates a positive recovery trend in major airports' production, with a steady optimization of passenger flow structure [1] Group 1: Passenger Traffic Recovery - From January to August 2025, cumulative production data for major listed airports shows a steady rebound [1] - Passenger throughput is benefiting from airlines adopting a price-for-volume strategy and stable demand, leading to a significant year-on-year improvement in load factors for major airlines [1] - The recovery of international flights has accelerated, with the year-on-year growth rate of passenger flow outpacing that of flight volume [1] Group 2: Industry Outlook - The aviation sector continues to recover, with an increase in international routes contributing to a steady rise in industry prosperity [1] - Major airports have sufficient ground capacity, and under the initiative to develop international hub airports, the structure is expected to continuously improve, leading to gradual recovery in profit elasticity [1] - It is recommended to focus on airports with a high proportion of international routes, as well as those with potential for transfer and regional passenger flow expansion [1]