Investment Rating - The report maintains an "Overweight" rating for the aviation sector, indicating a positive outlook for the industry compared to the overall market performance [7]. Core Insights - The aviation industry is experiencing steady growth in capacity and passenger volume, with August data showing a year-on-year increase in domestic passenger transport volume by 3.0% and domestic capacity by 1.3% compared to 2024 [3][4]. - The report highlights that airlines are increasing capacity to meet the demand during the peak summer travel season, with a notable rise in passenger turnover and load factors across major airlines [4]. - The analysis suggests that the supply-demand balance in the domestic market is improving, with significant growth in capacity and volume for airlines like Spring Airlines and China Eastern Airlines [4]. Summary by Sections August Data Overview - In August, the average daily aircraft utilization rate was 8.9 hours, showing a month-on-month increase of 0.3% and a year-on-year increase of 0.2% [4]. - Major airlines reported varying year-on-year changes in capacity (ASK) and passenger turnover (RPK), with Spring Airlines leading in growth [4][5]. Domestic Market Performance - The domestic market shows a balanced growth in supply and demand, with significant increases in capacity and volume for Spring Airlines, China Eastern Airlines, and China Southern Airlines [4]. - Year-on-year changes in ASK and RPK for major airlines indicate a mixed performance, with some airlines like Spring Airlines showing strong growth [5]. International Market Performance - Airlines are significantly increasing international capacity, with several airlines surpassing pre-pandemic levels in terms of capacity and passenger turnover [4]. - The report provides detailed year-on-year comparisons for international operations, highlighting the recovery trajectory of major airlines [5]. Investment Recommendations - The report recommends a focus on airlines such as China National Aviation, Spring Airlines, and China Eastern Airlines, citing strong supply logic and expected growth in passenger volume and load factors [4][7]. - The analysis anticipates a gradual slowdown in fleet supply growth over the next 3-5 years, with resilient demand expected to support the sector [4].

Core Insights - The domestic civil aviation market is experiencing a surge in travel demand as the summer travel season approaches, driven by various travel types such as summer vacations, family trips, and outbound travel [1][2] Group 1: Passenger Traffic Predictions - The domestic flight ticket bookings for July 2025 are projected to reach approximately 17.9 million, reflecting a year-on-year increase of about 5% [2] - International flight ticket bookings have exceeded 7.74 million, marking a year-on-year growth of around 14% [2] - Major domestic routes include Beijing-Shanghai, Beijing-Guangzhou, and Guangzhou-Shanghai, with significant interest in travel to Xinjiang this summer [2] Group 2: Airline Operations and Capacity - Hainan Airlines plans to operate 30,435 flights during the summer season, transporting approximately 4.59 million passengers [2] - Eastern Airlines will execute over 1,150 passenger routes with an average of more than 3,200 flights daily, representing a 5% increase compared to 2024 [2][3] - China Southern Airlines aims to operate over 320,000 flights across 970 domestic and 260 international routes, with daily flights exceeding 3,000 during peak periods [3][4] Group 3: New Routes and Seasonal Adjustments - Xiamen Airlines is launching 24 seasonal routes to popular summer destinations, including new flights from major hubs to Xinjiang and Inner Mongolia [5] - Sichuan Airlines is optimizing its domestic route network, adding and resuming over 10 routes, including direct flights from Chengdu to Hailar [5][6] - Eastern Airlines is introducing 38 new domestic routes, focusing on popular tourist regions such as Xinjiang and Inner Mongolia [7] Group 4: Market Trends and Pricing - The aviation industry is witnessing an upward trend in domestic ticket prices, with strong performance during the May Day holiday expected to carry into the summer season [8] - Analysts suggest that the improved pricing environment and strong summer demand may lead to better-than-expected profitability for the aviation sector in the second and third quarters [8]

Investment Rating - The report maintains a "Buy" rating for the transportation sector [8] Core Views - The report is optimistic about the aviation sector, anticipating a recovery in industry prosperity driven by the summer travel peak and favorable oil and exchange rates [2][28] - It recommends high-dividend Hong Kong-listed road stocks due to stable performance and low Hibor rates supporting dividend valuations [2] - The report notes increased volatility in the shipping sector, particularly in container shipping, while highlighting the need to focus on companies with stable earnings and high dividend yields [2] Aviation Sector - The report highlights strong demand during the May Day holiday, with daily passenger volume averaging 2.23 million, a year-on-year increase of 11.8% [20] - Domestic flight ticket prices have improved, with an average price of 730 RMB, up 0.8% year-on-year [15] - The supply of aircraft is expected to grow slowly, with a projected increase of only 2.8% in the passenger fleet by the end of 2024 [21] - Recommended stocks include China National Aviation, China Eastern Airlines, and Huaxia Airlines, which are expected to benefit from supply-demand improvements [28] Airport Sector - Airports are experiencing high growth in passenger traffic, particularly in southern China, with Baiyun Airport and Shenzhen Airport seeing year-on-year increases of 26.3% and 23.5% respectively [29] - The report emphasizes the need for airports to enhance their non-aeronautical revenue generation capabilities [37] - It suggests focusing on airports with lower capital expenditure, such as Capital Airport, for better investment value [37] Shipping Sector - Container shipping rates have increased significantly, with the Shanghai Export Container Freight Index rising by 18.4% month-on-month in May [4] - The report anticipates further increases in shipping volumes and rates in June due to the easing of tariffs and seasonal demand [39] - It notes that while the crude oil tanker market is improving due to OPEC+ production increases, the dry bulk and product tanker markets remain weak [38] Road and Rail Sector - The report indicates that the road sector is benefiting from lower Hibor rates, which support dividend yields, and suggests focusing on high-dividend stocks like Wuhu Highway and Zhejiang Hu-Hangzhou-Ningbo [5] - The railway freight sector is experiencing weak demand, particularly for coal transport, with expectations of a recovery only in late June [5] Logistics and Express Delivery - The express delivery sector is facing competitive pressures, with a year-on-year increase in parcel volume of 19.1% in April, but prices are declining [68] - The report suggests monitoring the upcoming peak season for potential changes in volume and pricing dynamics [68] - It highlights the need for cross-border logistics to adapt to evolving tariff conditions [68]

Investment Rating - The industry investment rating is "Overweight" [7] Core Viewpoints - The Dragon Boat Festival holiday travel was relatively subdued, with a total of 657 million people traveling, a year-on-year increase of 3.0%, which is lower than the initial forecast of 7.7% by the Ministry of Transport [2] - Short-distance travel demand showed slightly better performance compared to medium and long-distance travel, primarily due to frequent rainfall in southern regions and the proximity of the holiday to the college entrance examination [2] - The report recommends the aviation sector, particularly China National Aviation (A/H), as well as highway companies such as Anhui Wanshan Expressway (A/H), Zhejiang Huhang Expressway, and Guangdong Expressway A [2] Summary by Sections Aviation - During the Dragon Boat Festival, the average daily passenger volume for civil aviation was 1.867 million, a year-on-year increase of 1.22%, which is lower than the growth rates of rail and road transport [3] - The three-day holiday saw stable growth rates of 0%, 1.3%, and 2.4% respectively, with international routes showing a significant increase of 17.6% in flight volume [3] Road Transport - The total road passenger flow during the holiday was estimated at 600 million, with a daily average of 200 million, reflecting a year-on-year growth of 3.14% [4] - The growth rate of road passenger flow was slightly lower than the growth rate of vehicle ownership, which increased by 5.1% year-on-year by the end of 2024 [4] Rail Transport - The total railway passenger volume during the holiday was 47.108 million, with a daily average of 15.7027 million, showing a year-on-year increase of 2.3% [5] - The railway passenger volume experienced a good start on the first day with a 5.0% year-on-year increase, but saw a decline of 11.2% on the second day due to weather impacts [5] Recommended Stocks - China National Aviation (601111 CH) with a target price of 10.20 and a "Buy" rating [10] - Anhui Wanshan Expressway (600012 CH) with a target price of 18.60 and a "Buy" rating [10] - Zhejiang Huhang Expressway (576 HK) with a target price of 7.82 and a "Buy" rating [10] - Guangdong Expressway A (000429 CH) with a target price of 15.59 and a "Buy" rating [10]

Group 1 - China Galaxy Securities believes that the A-share market is expected to show stronger resilience in the long term, reflecting a "self-centered" approach [1] - The report suggests three key investment directions: 1) Defensive attributes of dividend sectors with stable returns amid increasing external uncertainties [1] 2) Clear logic in the "technology narrative" of the A-share market, with potential catalytic opportunities in future industrial trends [1] 3) Investment opportunities in the large consumption sector supported by intensive policies to boost service consumption [1] Group 2 - Huatai Securities indicates that the implementation of public fund reforms is likely to drive valuations in the banking sector [2] - The recent release of the "Action Plan for Promoting High-Quality Development of Public Funds" by the CSRC strengthens the constraints on performance benchmarks, suggesting future fund allocations may align more closely with these benchmarks [2] - The report highlights that there is significant room for increased allocation to banks, with a nearly 10 percentage point deviation from the CSI 300 index expected by Q1 2025 [2] Group 3 - Huatai Securities expresses optimism for the airline industry during the summer travel peak, anticipating airlines will realize ticket prices and profit elasticity [3] - The report notes that the supply growth rate in the airline industry will remain low, combined with effective revenue management by airlines, leading to an expected increase in annual revenue levels [3] - Additionally, a year-on-year decline in oil prices is expected to further enhance airline profitability [3]