Kingwo Financial News | The ubs group research report pointed out that recently, the stock prices of china's aviation industry have risen, mainly driven by improved investor sentiment. In particular, domestic investors have been significantly boosted by the year-on-year decline in domestic ticket prices and the favorable outlook for aviation fuel prices in 2025. Furthermore, Canada's cancellation of restrictions on the number of direct flights to china and the news that china southern airlines plans to sell 10 B787-8 aircraft have further boosted market confidence. The bank believes that in the next 2-3 years, if the growth of fleet size slows down, airlines may show the highest resilience when macroeconomic conditions rebound.

The bank holds a cautious optimistic attitude towards the prospects of China's aviation industry. Data shows that since November, the stock prices of A-share and H-share Chinese airlines have risen by 6% and 16% respectively, outperforming the CSI 300 and HSI. This strong stock price performance is mainly due to the improvement in investor sentiment, especially the improvement in domestic route ticket prices compared to the same period last year. UBS believes that although the market is currently trading more on marginal changes rather than fundamental turning points, it is expected that with the early peak of Chinese New Year travel, the improvement in domestic ticket prices compared to the same period last year may continue until 2025. However, with the normalization of the 1Q25 base and uncertainty in demand outlook, the bank sees downside risks.

The bank's top pick stock is Spring Airlines (601021.SH), expected to have a solid outlook for net income and ROE in 2025-26 driven by the expansion of flight volume in Japan and South Korea.