HK Stock Market Move | Aviation stocks mostly rise, with an optimistic outlook for supply and demand during the Spring Festival travel season, with the potential to demonstrate better-than-expected profit elasticity.

Aviation stocks mostly rose, as of the time of writing, Beijing Capital Airport (00694) rose by 3.23% to HKD 2.88; China Southern Airlines (01055) rose by 3.05% to HKD 4.05; Air China Limited (00753) rose by 2.59% to HKD 5.14; and China Eastern Airlines (00670) rose by 1.89% to HKD 2.7. In terms of news, JP Morgan released a research report pointing out that the global aviation industry has been performing better than expected since September last year. Initially facing investor skepticism due to cost pressures, normalization of revenue, and post-pandemic challenges, the aviation industry has successfully shifted focus and fully utilized high returns, benefiting mainly from strategic capacity management, a focus on quality service, and the ability to quickly adapt to changing market conditions. Guotai Junan believes that the Chinese aviation industry has a longer-than-expected logic of profit center rising, with the trend of supply and demand recovery confirmed by 2025. Considering the marketization of ticket prices and a significant slowdown in fleet growth, it is expected to open up the profit center. The demand for the Spring Festival in 2025 is expected to be strong with limited domestic capacity additions, the industry's supply and demand expectations are optimistic, coupled with improved oil price pressures, the industry is expected to show unexpected profit resilience, catalyzing optimistic expectations. The market's expectations for the long logic of aviation still remain low, the greater the differences, the greater the space.