In June of this year, aviation investment mainly focuses on the continued recovery of international route supply and demand, and it is expected that after the Dragon Boat Festival holiday, the mid-to-high-level exams in various places will gradually end, and civil aviation will usher in the peak season of summer transportation.
According to the research report released by Zhongtai Securities, aviation investment in June of this year mainly focuses on the continued recovery of international route supply and demand. It is expected that after the Dragon Boat Festival holiday, the mid-to-high-level exams in various places will gradually end, and civil aviation will usher in the peak season of summer transportation. Against the background of sustained growth in domestic and international demand, the supply and demand pattern of the industry is expected to continue to improve. It is hoped that the utilization rate of airplanes of various airlines will continue to recover, and the cost per seat kilometer is expected to continue to spread, thus driving sustainable improvement of performance.
Zhongtai Securities' main points are as follows:
Review of May's Performance
The sector rose 2.92% this month, better than the Shanghai Composite Index and the CSI 300. The aviation and airport sectors fell by 0.01% and 4.9%, respectively, and performed relatively weakly in the transportation sector. China Express Airlines (8.4%) and China Southern Airlines (3.7%) were the top gainers, while CITIC Offshore Helicopter (-19.3%) and Shanghai International Airport (-7.7%) had larger declines.
Review of Basic Situation
In May, the popularity of inbound and outbound tourism markets continued to rise, and subsequent markets are expected to continue to recover. According to the big data of travel agencies, from May 1st to 14th, the number of inbound and outbound civil aviation passengers of domestic airlines exceeded 2.24 million. The number of inbound civil aviation passengers of domestic airlines increased by about 1.2 times year-on-year, and the number of outbound civil aviation passengers increased by about 1.4 times year-on-year. Data from Ctrip shows that the number of tourist visa applications in the second quarter doubled year-on-year, up 20% from 2019. After the May Day holiday, the number of people applying for summer visas doubled before the May Day holiday, and it is expected that the popularity of inbound and outbound tourism markets will continue to rise with the approach of the peak season of summer transportation.
In May, low-altitude economic policies continued to exert their efforts. Beijing, Guangzhou, Hainan, and other places loosened their restrictions on low-altitude economy again, and introduced a variety of encouragement policies around emergency rescue, logistics distribution, air shuttle, intercity commuting, and special tourism applications, to promote the development of the low-altitude economic industry chain. Taking the Guangzhou Low-altitude Economic Development Implementation Plan as an example, by 2027, the overall scale of Guangzhou's low-altitude economy will reach about 150 billion yuan.
The draft restrictive stock incentive plan of Shanghai International Airport A shares was released. This incentive plan will effectively bind the interests of the management, but the set unlocking performance target is lower than that of 2019, mainly due to the expected decline in duty-free income.
Trends of Industry Recovery in May: In May 2024, the total number of industry flights recovered to 101% of the same period in 2019, and the domestic, international, and regional flight volume recovered to 108%, 73%, and 65% of the same period in 2019, respectively.
Situation of Listed Airlines in April: The six major listed airlines increased their net aircraft numbers by a total of 4 in April. Only Juneyao Airlines increased its available seat kilometers and passenger turnover month-on-month, while other airlines decreased month-on-month. The passenger load factor of Spring Airlines was in the leading position.
Situation of Listed Airports in April: Judging from passenger volume data, the passenger volumes of Haikou Meilan, Shenzhen Baoan, Xiamen Gaoqi, Shanghai Pudong, Guangzhou Baiyun, and Beijing Capital have recovered to 118%, 103%, 99%, 96%, 91%, and 67% of the same period in 2019, respectively. The flight volume of Haikou Meilan, Shenzhen Baoan, Shanghai Pudong, Xiamen Gaoqi, Guangzhou Baiyun, and Beijing Capital were 123%, 105%, 100%, 97%, 91%, and 75% of the same period in 2019, respectively.
Recommended Targets: Key recommendation for China Express Airlines (002928.SZ), which has stronger deterministic marginal improvement and benefits from branch line subsidy policies; Spring Airlines(601021.SH) and Juneyao Airlines(603885.SH), which have stronger deterministic performance; China Southern Airlines(600029.SH), which is the first among the three major airlines to turn losses into gains; recommended to pay attention to China Eastern Airlines Corporation(600115.SH), Shanghai International Airport(600009.SH), and CITIC Offshore Helicopter(000099.SZ), which are benefited from the favorable policies of the low-altitude economy.
Risk Warning: risks of macroeconomic downturn, rising oil prices, exchange rate fluctuations, and delayed information updates in research reports.