Zheshang's transportation industry 24H1 performance overview: booming marine business in the first half of the year, with a promising peak season ahead for shipping and logistics.

Zheshang released a summary of the transportation industry's semi-annual report, stating that geopolitical events in the first half of the year drove the improvement of shipping data, leading to a recovery in the performance of listed companies. Overseas operations also steadily improved, especially with a significant increase in throughput, resulting in stable growth in the performance of port-listed companies in the first half of the year. E-commerce drove express delivery to achieve moderate growth, with the industry's parcel volume growth since 2024 better than expected, and price competition continuing but easing compared to the previous year. Passenger and freight transportation performance showed some differentiation, with passenger transportation showing continued recovery while road and railway freight continued to be under pressure. Additionally, overall, transportation industry companies increased their mid-term dividends. Zheshang's main points are as follows: 1. Geopolitical events continue to drive continued prosperity in shipping Oil Shipping: Global geopolitical tensions continued to escalate, and the rerouting of products due to the Red Sea incident significantly increased the demand for oil tanker ton-miles. Nanjing Tanker Corporation's net profit attributable to the parent company in the second quarter of 24 increased by 26% year-on-year to 549 million yuan, and the non-net profit attributable to the parent company increased by 9% year-on-year to 476 million yuan. Container Shipping: In the first half of 2024, affected by geopolitical factors such as the Red Sea conflict, container shipping companies experienced reduced effective capacity due to detours, leading to a significant increase in freight rates. The SCFI increased by 138% year-on-year and the CCFI index increased by 35%. With the rise in international container shipping prices, COSCO Shipping Holdings achieved a net profit attributable to the parent company of 16.9 billion yuan in the first half of 24, an increase of 1.9% year-on-year. 2. Strong growth in overseas operations Jiaoyou: The Central Mongolian business remained in high demand, with the African Kasajiao Road and Port project continuously increasing traffic volumes, driving performance beyond expectations. In the first half of 24, the company achieved operating income of 4.64 billion yuan, a 65% year-on-year increase, and a net profit attributable to the parent company of 759 million yuan, a 51% year-on-year increase. In the second quarter of 24, the company achieved operating income of 2.65 billion yuan, an increase of 116% year-on-year, with a net profit attributable to the parent company of 450 million yuan, an increase of 50% year-on-year, and a net profit margin of approximately 17%. Air transport: The outbound air freight index at Shanghai Pudong steadily increased in the first half of 24, with an average BAI80 index of about 4313 points, an increase of 3% year-on-year, and an average of about 4692 points in the second quarter of 24, an increase of 23% year-on-year. Benefiting from the increase in second-quarter freight rates, Eastern Air Logistics saw a 35% year-on-year increase in net profit attributable to the parent company. Port: In the first half of 24, the port cargo throughput increased by 4.6% year-on-year, and container throughput increased by 8.5% year-on-year. In the second quarter of 24, port cargo throughput increased by 3.2% year-on-year, and container throughput increased by 7.1% year-on-year. Against the backdrop of a significant increase in throughput, the performance of port-listed companies in the first half of 24 continued to grow steadily. Tangshan Port Group, China Merchants Port Group, and QINGDAO PORT reported year-on-year increases in net profit attributable to the parent company of 7.2%, 33.9%, and 3.1% respectively in the first half of 24, and increases of 9.7%, 43.5%, and 1.6% respectively in the second quarter of 24. 3. E-commerce drives express delivery to achieve moderate growth Since 2024, live e-commerce platforms such as Douyin have seen rapid development, combined with a decrease in the value of individual packages, leading to a faster-than-expected growth in parcel volume in the first half of 24. In the first half of 24, the express delivery industry completed a total of 80.16 billion transactions, a year-on-year increase of 23.1%, and achieved total revenue of 653.0 billion yuan, a year-on-year increase of 15.1%. Since 2024, the growth in parcel volume in the industry has been better than expected, with price competition continuing but easing compared to 23. 4. Passenger transport: Overall showing a continued recovery trend Railway: In the second quarter of 24, the total passenger volume on national railways reached 1 billion person-times, an increase of 10% year-on-year, and the total passenger turnover reached 382.9 billion passenger-kilometers, an increase of 5% year-on-year. Guangshen Railway, with more tourist flows passing directly through Hong Kong, saw a bright performance, reporting an income of 6.324 billion yuan in the second quarter of 24, an increase of 1% year-on-year, with a net profit attributable to the parent company of 365 million yuan, an increase of 34% year-on-year. The Beijing-Shanghai High-Speed Railway reported an income of 10.756 billion yuan in the second quarter of 24, an increase of 4% year-on-year, with a net profit attributable to the parent company of 3.394 billion yuan, an increase of 17% year-on-year, and an increase of 14% compared to 19. This may be due to a decrease in business and travel passenger flows affecting local line demand. Highway: In the first half of 24, the total commercial passenger volume on national highways was 5.8 billion person-times, an increase of 11% year-on-year. Jiangsu Expressway's traffic volume on the controlled network was approximately 60,000 vehicles/day in the first half of 24, an increase of 4.85% year-on-year. Aviation: Demand for private travel outperformed business demand, resulting in busy holiday periods. Travel showed a trend of increasing volume and decreasing prices, with consumers paying more attention to "value for money." In the first six months of 24, the total domestic aviation passenger volume reached approximately 350 million person-times, an increase of 23.5% compared to 23, and an increase of 9.0% compared to 19. According to data from the Ministry of Culture and Tourism, the number of domestic tourists during the May 1st and Dragon Boat Festival holidays increased by 28% and 20%, respectively, compared to the same period in 2019, with an average per capita travel expenditure of -11% and -14%, respectively, compared to the same period in 2019. 5. Freight transport: Road and rail freight under pressure Railway: National railway freight volume in the first half of 24 was 25.13 billion tons, an increase of 2% year-on-year, with a freight turnover of 1.75 trillion ton-kilometers, a decrease of 3% year-on-year. Daqin Railway reported operating income of 36.61 billion yuan in the first half of 24, a decrease of 9% year-on-year, and a net profit attributable to the parent company of 5.86 billion yuan, a decrease of 22% year-on-year. In the second quarter of 24, operating income was 18.34 billion yuan, a decrease of 11% year-on-year, with a net profit attributable to the parent company of 2.82 billion yuan, a decrease of 27% year-on-year. Highway: In the first half of 24, due to insufficient domestic demand, increased numbers of severe weather days, and increased toll-free holidays, the flow of trucks on highways was under pressure. Income from tolls on roads operated by Shandong Hi-speed, Jiangsu Expressway, Anhui Expressway, Guangdong High-speed, and Shenzhen Expressway Corporation decreased year-on-year by -1%.0.3%, +0.2%, -8.5%, -4.6%, -6.4%6. Companies increasing mid-term dividends Oil shipping: COSCO Shipping Energy Transportation plans to distribute 30%-50% of mid-term dividends for 24H1, with the specific distribution plan to be reviewed by the board before the end of October. China Merchants Energy Shipping distributed mid-term dividends of 32.6% and committed to ensuring that the total cash dividends for 2024-2026 should account for around 40% of the annual net profit attributable to shareholders (including cash for share buybacks). Railways: Daqin Railway implemented mid-term profit distribution for the first time, with cash dividends amounting to 40.24% of the net profit attributable to shareholders for the period. Ports: Shanghai International Port carried out mid-term dividends for the first time, with a cash dividend rate of 13.83%. Cross-border logistics: Eastern Air Logistics introduced mid-term dividends for the first time, with a cash dividend rate of 48.35%; Sinotrans Limited and CTS International Logistics Corporation had mid-term cash dividend rates of 54.17% and 50.11% respectively; Jiayou International Logistics implemented mid-term dividends for the first time, with cash dividends accounting for 38.5% of the net profit attributable to shareholders for the period. Aviation: Juneyao Airlines reintroduced mid-term dividends since 2016, with cash dividends accounting for 40.3% of the net profit attributable to shareholders for the period. Airports: Shanghai International Airport reintroduced mid-term dividends for the first time since 2006, with cash dividends accounting for 30.5% of the net profit attributable to shareholders for the period.