Guosen Securities: Airlines are expected to usher in a situation where both volume and price rise together, seize the opportunity to layout at the bottom of the airport.
The optimization of supply and demand situation coupled with the improvement of oil prices, the marginal improvement of several factors, further opens up the marketization space of ticket prices, airlines are expected to usher in a situation of simultaneous increase in volume and price, and the level of profitability may further increase.
Galaxy Securities released a research report stating that by the year 2025, with the acceleration of the increase in international flights and the continued trend, coupled with the boost in domestic demand after the introduction of the "924" comprehensive policy, the demand for civil aviation travel in 2025 is expected to further release. With the optimization of the supply and demand structure and the improvement in oil and exchange rate prices, the market space for ticket prices is further opened up. Airlines are expected to usher in a situation where both volume and price rise, and profitability may further increase.
The main points of Galaxy Securities are as follows:
Industry review of the sector this week: From July 28th to August 2nd, among the 31 SW primary industries, the cumulative change in the transportation industry was -3.22%, ranking 27th; the change in the Shanghai and Shenzhen 300 Index was -1.75%.
For the transportation sector, the cumulative changes in various sub-sectors this week were: express delivery (-1.54%), cross-border logistics (-1.68%), ports (-2.40%), warehousing and logistics (-2.44%), highways (-2.93%), railways (-3.17%), transportation (-3.22%), shipping (-4.20%), airports (-4.39%), road freight (-5.23%), and public transportation (-6.50%).
Tracking the fundamentals of airports: Looking at the recovery of capacity, in June 2025, among the major listed airlines in China, the monthly domestic Available Seat Kilometers (ASK) recovery rates of Air China, China Southern Airlines, China Eastern Airlines, Hainan Airlines, Lucky Air, and Spring Airlines compared to the same period in 2019 were 150.62%, 119.55%, 118.06%, 91.71%, 118.27%, and 166.49%, respectively. The monthly international and regional ASK recovery rates compared to the same period in 2019 were 93.36%, 92.68%, 110.76%, 69.95%, 254.76%, and 80.08%, respectively.
Oil and exchange rates: As of August 1, 2025, the price of Brent crude oil closed at $69.67 per barrel, an increase of +2.97% on a weekly basis, a decrease of -12.39% compared to the same period in 2024, and an increase of +15.16% compared to the same period in 2019. As of August 1, 2025, the exchange rate of the Chinese Yuan against the US Dollar closed at 7.1496, with a depreciation of 0.11% on a weekly basis, a depreciation of 0.24% compared to the same period in 2024, and a depreciation of 3.71% compared to the same period in 2019.
Airports: In terms of passenger volume recovery, in June 2025, among the major listed airports in China, the monthly domestic passenger throughput rates of Guangzhou Baiyun International Airport, Shanghai International Airport, Capital Airport, and Shenzhen Airport compared to the same period in 2019 were 120.08%, 119.80%, 80.14%, and 127.40%, respectively. The monthly international and regional passenger throughput rates compared to the same period in 2019 were 89.95%, 98.12%, 94.60%, and 104.41%, respectively.
Tracking the fundamentals of shipping ports: As of August 1, 2025, the SCFI closed at 1551 points, with a weekly decrease of -2.63% and a year-on-year decrease of -53.47%; the CCFI closed at 1232 points, with a weekly decrease of -2.30% and a year-on-year decrease of -42.24%. Looking at specific routes, the CCFI East Coast route closed at 1081 points, with a weekly decrease of -3.22% and a year-on-year decrease of -40.97%; the CCFI West Coast route closed at 877 points, with a weekly decrease of -0.50% and a year-on-year decrease of -44.09%; the CCFI Europe route closed at 1790 points, with a weekly increase of +0.13% and a year-on-year decrease of -51.43%; the CCFI Mediterranean route closed at 1985 points, with a weekly decrease of -4.61% and a year-on-year decrease of -45.36%.
Oil transportation: As of August 1, 2025, the BDTI closed at 956 points, with a weekly increase of +8.39% and a year-on-year decrease of -0.42%; the BCTI closed at 652 points, with a weekly increase of +1.24% and a year-on-year decrease of -14.21%.
Dry bulk cargo transportation: As of August 1, 2025, the BDI closed at 2018 points, with a weekly decrease of -10.59% and a year-on-year increase of +20.98%; looking at specific ship types, the BPI closed at 1644 points, with a weekly decrease of -10.55% and a year-on-year decrease of -4.03%; the BCI closed at 3296 points, with a weekly decrease of -13.92% and a year-on-year increase of +43.99%; the BSI closed at 1269 points, with a weekly decrease of -1.93% and a year-on-year decrease of -6.14%.
Tracking the fundamentals of road and rail transportation: Railways: In June 2025, railway passenger volume reached 373 million people, an increase of +3.61% year-on-year; railway passenger turnover reached 1296.69 billion passenger-kilometers, an increase of +2.21% year-on-year; railway freight volume reached 438 million tons, an increase of +2.24% year-on-year; railway freight turnover reached 2942.78 billion ton-kilometers, a decrease of -0.06% year-on-year.
Roads: In June 2025, road passenger volume was 948 million people, a decrease of -3.72% year-on-year; road passenger turnover was 434.00 billion passenger-kilometers, an increase of +0.10% year-on-year; road freight volume reached 36.51 billion tons, an increase of +2.87% year-on-year; road freight turnover reached 6782.23 billion ton-kilometers, an increase of +3.26% year-on-year.
Tracking the fundamentals of express delivery and logistics: Express delivery: In June 2025, the express delivery industry achieved revenue of 126.32 billion yuan, an increase of 9.00% year-on-year; the volume of express delivery reached 16.87 billion pieces, an increase of 15.80% year-on-year. The average price for express delivery in June was 7.49 yuan per piece, a decrease of 5.85% year-on-year.
Investment recommendation
For the aviation sector, with the acceleration of the increase in international flights and the boost in domestic demand after the introduction of the "924" comprehensive policy, the demand for civil aviation travel in 2025 is expected to further release. With the optimization of the supply and demand structure and the improvement in oil and exchange rate prices, the market space for ticket prices is further opened up, and airlines are expected to usher in a situation where both volume and price rise, potentially leading to increased profitability.
For the airport sector, the pessimistic sentiment regarding the decline in the renegotiation of duty-free agreements for airport sectors has already been priced in. The recovery of international passenger flows will continue to be a major focus for the airport sector in the future. Additionally, driven by comprehensive policies, the further recovery of the macro economy and domestic consumption will provide momentum for the increase in commercial sector average spending in 2025. The revision of duty-free agreements at hub airports and the progress in leasing taxable stores need further attention. While the duty-free deduction rate is unlikely to return to pre-epidemic levels in the future, with limited downside under certain expectations, the accelerated entry of luxury brands is expected to bring new value growth points. It is recommended to seize the bottom-up opportunities of the airport sector.
For the cross-border logistics sector, from a macro perspective, in the context of weak overall domestic demand and oversupply in the local manufacturing industry in China, external exports have become a key layout direction, with cross-border e-commerce accelerating as a new format of foreign trade. In the medium term, the optimization and upgrading of the product structure of domestic manufacturing brands in China going global has accelerated the global expansion of cross-border e-commerce. Based on this, China's "Four Small Dragons Going Global" are rising against the trend in business globally, further catalyzing a wave of accelerated growth in demand for cross-border e-commerce. As an important link in cross-border e-commerce, cross-border logistics is expected to benefit from the bullish market of cross-border e-commerce.
For the express delivery sector, with the accelerated development of new e-commerce formats, top express delivery companies are striving to create differentiated competitive advantages, and the industry still has growth prospects. In terms of B2B/dangerous goods logistics, in 2025, the B2B logistics industry may continue to benefit from comprehensive policies, with more significant stimulus effects on demand, and a trend of warming and improvement in volume and price performance. Combined with the ongoing optimization and consolidation of industry competition structure, the concentration continues to increase, and the market share of leading companies may further stabilize and rise, with prospects for the release of performance potential.
Risk warning
Risks of international flight recovery and expansion not meeting expectations; risks of significant increase in oil prices and fluctuations in the exchange rate of the Chinese Yuan; risks of delays in the construction progress of airport expansion projects; risks of significant decline in air and sea freight prices; risks arising from changes in the international trade situation under geopolitical conflicts.
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