Shenwan Hongyuan Group: Express delivery volume increases in price, seize the opportunity to layout the expectation of combined recession during the off-season.

The Shenwan Hongyuan Group published a research report stating that the express delivery industry has responded to the call to combat "overwork culture" by actively implementing price increases to maintain the healthy development of the industry. There is potential for significant performance flexibility and the express delivery industry is expected to see a price increase trend during the peak season. In the shipping sector, adjustments are being made, with a reaffirmation of the current upward trend in long-term ship prices. The outlook for the mid-term decline is combined with the pessimistic sentiment at the bottom of the seasonal off-peak period, putting pressure on valuations. The team emphasized the investment theme of "international + supply" as a dual driving force until 2024, focusing on the continuous recovery opportunities in the aviation airport sector. Shipbuilding companies have suspended trading, with the resolution of competition issues between CSSC Offshore & Marine Engineering and Hudong-Zhonghua Shipbuilding being the first step. Follow-up attention will be on EPS thickening, plans for the rationalization of state-owned enterprises and listed companies, and the overall performance after the restructuring. The team is focusing on the timing of the shipbuilding cycle and performance landing situations. In the shipping sector, there is an emphasis on the current upward trend in long-term ship prices, with the mid-term decline expected to add to the pessimistic valuation pressure from the seasonal off-peak sentiment. With low inventory levels, the upward trend in ship prices remains unchanged. Opportunities for layout at low points are being recommended, with a focus on companies like COSCO Shipping Energy Transportation, China Merchants Energy Shipping, Nanjing Tanker Corporation, and Xingtong Shipping. For crude oil shipping, VLCC rates increased by 28% to $22,958 per day this week. Economic actions by oil-producing countries are causing oil price fluctuations, with recent developments such as the gradual recovery of oil production in Libya and the postponement of OPEC's decision to increase production in October due to US economic data. It is recommended to view these developments rationally, as member countries may have long-term plans to gradually increase production. Important events to watch for by the end of the year include the US elections and the OPEC+ meeting. In terms of refined oil shipping, LR2 rates decreased by 1% to $19,341 per day, while MR rates decreased by 10% to $15,546 per day. Both markets are showing potential for improvement in the coming months. In dry bulk shipping, the BDI index rose by 8.2% this week, primarily due to support from large ship rates. In container shipping, the SCFI recorded 2726.58 points on September 6, with a weekly decline of 8.0%. Rates on the European route fell by 10.8% to $3,459 per TEU, while rates on the North American route also saw significant declines. Domestic container shipping saw a 1.8% decrease in the PDCI index. In shipbuilding, new ship prices rose by 4.90% since the beginning of the year.The secretary of the Party group and director of the East Postal Administration met with YTO Express Group co-founder Zhang Xiaojuan and her team, stating that YTO Express Group, as a major brand enterprise in the express delivery industry, has played a positive role in promoting industry development and maintaining industry stability. They hope that YTO Express Group can play a leading role in brand promotion, optimize brand network layout, strengthen the construction of grassroots express delivery outlets, continuously improve service efficiency and quality, prevent and control vicious competition, and better maintain market order. According to Yibao Network information, many express delivery services have announced price increases starting from September 1, with the Chaozhou-Shantou area seeing a price increase of 0.6 yuan. Investment analysis opinion: Express delivery services are entering a peak season for price increases. The express delivery industry is responding to the call to "fight against vicious competition" by actively implementing price increases to maintain a healthy industry ecosystem. There is potential for significant performance elasticity, and we recommend STO Express Co., Ltd., which has high volume growth and high profit elasticity, as well as YTO Express Group, which continues to improve its operational quality and services with stable performance growth. We also suggest paying attention to Yunda Holding and Zhongtong Express.Airport: 1) The Hong Kong Civil Aviation Department is following up on the CATHAY PAC AIR A350 aircraft malfunction incident. On September 4, the Hong Kong Special Administrative Region Government Civil Aviation Department stated that they are closely monitoring the A350 aircraft engine component malfunction incident. Since receiving notification from CATHAY PAC AIR on September 2 about the engine component malfunction on an aircraft departing for Zurich earlier that day, they have been in close contact with CATHAY PAC AIR and provided regulatory advice. The Civil Aviation Department met with the engineering management of CATHAY PAC AIR on September 3 to stay informed about the latest investigation and repair progress. 2) Investment analysis opinion: Emphasize the investment theme of the "international + supply" dual-drive in 2024, and focus on the continuous recovery opportunities in the airport sector. Recommended Juneyao Airlines, Air China Limited, Spring Airlines, China Southern Airlines. Focus on global aircraft leasing companies, aircraft engine and maintenance manufacturers, and pay attention to BOC AVIATION.