Hong Kong stock concept tracking | Tourism fever rising! National Day and Mid-Autumn Festival daily air ticket booking volume increased by over 25%. Institutions are optimistic about the profit elasticity brought by the recovery of seat occupancy (including concept stocks).

On September 16, airline stocks rose in the afternoon, with Air China Limited (00753) and China Eastern Airlines (00670) both rising by over 4%, and China Southern Airlines (01055) rising by over 2% by the closing bell. According to CCTV News, the National Day and Mid-Autumn Festival holidays will be combined in 2025, with an eight-day holiday from October 1 to October 8, leading to a surge in holiday travel this year. Additionally, with the crackdown on "involution" competition, the aviation industry is expected to see an improvement. Cinda points out that they are optimistic about the profitability brought by the improvement in supply and demand. With strong certainty in supply contraction, there is limited room for improvement in overall peak season capacity. The Civil Aviation Administration has specifically deployed comprehensive rectification of "involution" competition in the civil aviation field, guiding the industry to return to rational competition and orderly development, with the industry structure expected to continue to improve. Looking at specific data, as of September 13, the number of domestic airline tickets booked for the National Day and Mid-Autumn Festival holidays exceeded 4.52 million, with a daily average increase of over 25% compared to the same period last year. As of September 13, the number of international and domestic flight tickets booked for the holidays exceeded 1.29 million, with a daily average increase of about 14% compared to the same period last year. In terms of search volume, data from online travel booking platforms shows that domestic flight searches have increased by over 30%, with "viewing the moon" and "autumn scenery" becoming hot keywords for holiday travel. The search volume for keywords such as "scenery" and "moon viewing" has increased by 117% year-on-year, with search volume for mountainous scenic areas and ancient garden towns increasing by over 80% on a week-on-week basis. Popular travel destinations include Beijing, Shanghai, Chengdu, and Guangzhou. In terms of ticket prices, according to TONGCHENGTRAVEL, domestic flight ticket prices during the National Day holiday are generally consistent with the same period last year, showing a trend of being "high at the beginning and end, and low in the middle". With the push for "spliced vacations", it is expected that October 4th to 5th will see a peak in domestic air travel during the holiday period. Furthermore, the National Civil Aviation Mid-Year Work TV and telephone conference was held in Beijing on July 22, 2025, where the Director of the Civil Aviation Administration, Song Zhiyong, emphasized the optimization of route network layout, actively serving the expansion of domestic demand and opening up to the outside world; accelerating the construction of a unified large market in the civil aviation field, and comprehensively rectifying industry "involution" competition. Prior to this, on June 26, the Civil Aviation Administration held a telephone conference to specifically deploy comprehensive rectification of "involution" competition in the civil aviation field. Upper-level guidance is leading to orderly development in the industry, with competition returning to rationality, and the industry structure expected to continue to improve. Looking back at the summer peak travel season, low supply growth and strong private demand led to a lackluster peak season for travel related to public and commercial activities. In terms of demand, the summer travel peak has come to a close, with estimated year-on-year growth of over 3% in air passenger traffic and a 1% increase in load factor, both reaching historical highs. Domestic airfares including fuel surcharges decreased by 4-5% year-on-year, lower than previous expectations. 1) Domestic supply has remained at low growth. In the first half of the year, the overall industry's fleet size has only seen a slight increase, with limited room for growth in domestic air transport capacity during the summer peak, and the Civil Aviation Administration of China strictly controlling overtime. According to data from Flight Manager, it is estimated that domestic passenger flights during the summer peak increased by only 2% year-on-year; and in July, ASK for domestic flights of the three major airlines only increased by 3% year-on-year. 2) Private demand has been strong. Summer leisure travel and cultural tourism exhibitions, especially those involving families and children, have been popular, with a noticeable increase in the proportion of child and youth passengers. Passenger traffic remained high towards the end of August, and high load factors forced ticket prices to rebound, surpassing the low base of the same period in 2024. 3) Public and commercial demand unexpectedly weakened, leading to a noticeable decline in ticket prices towards the end of the summer travel season. The sudden drop in public and commercial demand, possibly due to temporary factors, is being observed. Considering the impact of major events in early September and significant conferences in October, it is expected that public and commercial demand will significantly recover in the later part of September, with a focus on the sustained recovery of public and commercial activity in November and December. 4) Significant profits are still expected during the peak season. With a nearly 13% year-on-year decrease in aviation fuel prices during the summer, estimates suggest that with stable ticket prices and increased passenger traffic, significant profits are expected. In terms of supply, the bottleneck in Chinese civil aviation airspace persists, with the Civil Aviation Administration of China having rigorously controlled flight schedules over several flight seasons in the past. It is expected that the Civil Aviation Administration of China will continue to control the growth of flight schedules, especially coordinating the total capacity of airport schedules or maintaining stability. Considering limited fleet expansion and turnover improvement in 2025, it is expected that domestic supply during the off-peak season will continue to grow slowly. A price war in the fourth quarter of 2024 may result in significant losses for airlines, but it is expected that in the short term, excessive low pricing will be controlled, and in the medium term, policy guidance will lead to improved revenue management for airlines in the trunk market. It is expected that in the off-peak season of the fourth quarter of 2025, airlines will significantly reduce losses and the industry as a whole will return to profitability by the end of the year. Additionally, delays in supply chain disruptions have led to delays in aircraft deliveries, with China Airlines/ China Southern Airlines/ Air China/ Spring Airlines/ Lucky Air/ Hainan Airlines having net increases in aircraft speeds of +0.4%/+2.8%/+1.5%/+3.1%/+2.4%/0% respectively in the first half of 2025. Engine issues causing forced grounding and maintenance inspections limit the utilization of aircraft by airlines, potentially further exacerbating capacity shortages. Moreover, rising oil prices are expected to increase airline profitability. In terms of oil prices, the average price of aviation kerosene in the first and second quarters of 2025 was 5952 and 5385 yuan per ton respectively, representing a decrease of 10.0% and 17.0% year-on-year compared to the same period in 2024. Domestic aviation fuel prices in July rose compared to the previous month to 5437 yuan per ton, a 12.8% year-on-year decrease. As of July 22, 2025, the average settlement price for Brent crude oil futures in July was $69.07 per barrel, a 19.0% decrease year-on-year. In terms of exchange rates, the exchange rate remained stable from the beginning of 2025. As of July 23, 2025, the mid-point exchange rate of the US dollar to the Chinese yuan was 7.141, a decrease of 0.65% compared to the end of 2024. With oil prices trending downwards and stable exchange rates, airline profits are expected to further increase. Guotai Haitong believes that the aviation industry has long-term logic and recommends increasing positions in a contrarian manner. The Chinese aviation industry has long-term logic, with ticket prices being market-driven, aviation supply entering a period of slow growth, short-term demand fluctuations not affecting the medium-term stable growth, and future profit centers moving upwards and remaining sustainable. The recommendation is to increase positions in the long-term logic of the aviation industry. A price war in the fourth quarter of 2024 may result in significant losses for airlines, but it is expected that in the short term, excessive low pricing will be controlled, and in the medium term, policy guidance will lead to improved revenue management for airlines in the trunk market. The bank expects that in the fourth quarter of 2025, airlines in the off-peak season will significantly reduce losses, and the industry as a whole will return to profitability by the end of the year. Related concept stocks: Air China Limited (00753): The company announced its performance for the first half of 2025, achieving operating income of 80.76 billion yuan, a year-on-year increase of 1.6%, and a net loss attributable to the parent company of 1.81 billion yuan, a decrease of 9.8 billion yuan compared to the previous year. Among them, in the second quarter, operating income was 40.73 billion yuan, a year-on-year increase of 3.2% and a quarter-on-quarter increase of 1.8%, with a net profit attributable to the parent company of 2.4 billion yuan, compared to a net loss of 11.1 billion yuan in the same period last year, marking a return to profit for the quarter. In the long term, the company has a strategic position with a hub network centered around Beijing Capital International Airport, covering the most developed economic regions and densely populated areas in China, benefiting from key market sources in Beijing and international routes. China Eastern Airlines (00670): In the first half of 2025, the company achieved operating income of 66.822 billion yuan, a year-on-year increase of 4.09%, and a net profit attributable to the parent company of -1.431 billion yuan (compared to -2.768 billion yuan in the same period last year). In the second quarter alone, the company achieved operating income of 33.416 billion yuan, a year-on-year increase of 7.76%, with a net profit attributable to the parent company of -0.436 billion yuan (compared to -1.965 billion yuan in the same period last year). As of the first half of 2025, the company had a total of 816 aircraft, with a net increase of 12 planes in the first half of the year. According to the latest disclosure of the company's fleet introduction plan for 2025-2027, the company plans to add 34, 12, and 15 planes in the years 2025, 2026, and 2027 respectively. China Southern Airlines (01055): The company announced its performance for the first half of 2025, achieving operating income of 86.29 billion yuan, a year-on-year increase of 1.8%, and a non-GAAP net loss attributable to the parent company of 2.03 billion yuan, which is a decrease of 1.43 billion yuan compared to the previous year; for the second quarter, the company achieved operating income of 42.88 billion yuan, a year-on-year increase of 6.7%, with a non-GAAP net loss attributable to the parent company of 0.87 billion yuan, marking a decrease of 3.14 billion yuan compared to last year. With the recovery of international passenger travel and macroeconomic growth, the industry supply-demand structure is expected to gradually improve, leading to the continued recovery of operational efficiency and profitability for the company in 2025.