Golden opportunities in the transportation industry in 2026: Focus on the recovery of stocks benefiting from industry dividends and opportunities to counteract internal competition.

Zhongjin released a research report saying that from the beginning of 2025 to early 2025, the A-share Shenwan Transportation Index rose by 1%, underperforming the market, mainly affected by the pullback of infrastructure dividend assets such as highways, railways, and ports, with the trend of Hong Kong stocks stronger than A-shares. Looking ahead to 2026, the bank is optimistic about: 1) the pullback of dividend assets; 2) growth opportunities in express logistics: focus on the anti-monopoly of express delivery, and the penetration of technology into logistics; 3) structural opportunities in cycles, such as the elasticity of supply and demand in aviation, medium and small ships in shipping, and oil transport VLCC. The main points of Zhongjin are as follows: Express delivery: The joining system of express delivery examines the results and sustainability of anti-monopoly, and direct express delivery logistics may see recovery Demand side: Under a high base, the growth rate is slowing down, and the growth rate in 2026 may be low and then high. In the first nine months of 2025, the volume of express delivery business increased by 17.2% year-on-year, exceeding expectations at the beginning of the year, mainly driven by new consumption scenarios such as live e-commerce and demand in the central and western regions. Since the third quarter, the growth rate has slowed down, with a year-on-year increase of 15.1% in July, and a further decline to 12.3% and 12.7% in August and September respectively. The bank expects a stable performance in express delivery demand, with the year-on-year growth rate slowing down to around 10% in 2026 under a high base, showing a trend of low growth and then high growth. Competitive side: According to the three "competing" theory of Zhongjin Express, the market, regulatory, and platform factors are mutually balanced. The most important variable in 2025 is on the regulatory side. After the central financial committee set the tone, the State Post Bureau carried out anti-monopoly actions in the industry, which has shown some results so far, reflected in industry and listed companies' single ticket price data. The bank believes that each link in the express delivery industry (headquarters, franchisees, couriers) needs to maintain reasonable profitability or income levels. If industry demand pressure increases (market factors), it will further test how policies balance industry development and quality, and will also demand higher strategic determination and cost control from listed companies. Franchise-based express delivery: Examining the results and sustainability of anti-monopoly. Considering the low base of single ticket profit in 2025, and the elasticity of company profits to single ticket profit is greater than to business volume growth rate, the bank believes that the profit growth of the franchise-based express delivery industry in 2026 has strong certainty. Currently, there are divergent views in the market on the sustainability of prices, and this requires further verification. For example, regulating behaviors competing below cost according to the Price Law may help set a price floor for the industry. Direct express delivery logistics: Expected to see recovery. Non-express logistics: Sector rotation, select individual stocks The performance of the sector in 2025 reflects several characteristics: first, the sector as a whole underperformed the market, second, there was internal differentiation within the sector (small market capitalization outperformed large market cap), and finally, there was faster rotation within the sector. Looking ahead to 2026: the bank believes that under certain uncertainties in the internal and external environment, the profit impact factors of core targets within the sector are complex and variable, and individual stocks will remain the focus next year. Highways and railways: Cost-effective after a pullback Since June 2025 (until the end of September), the highway index has underperformed the Shanghai and Shenzhen 300 and the CSI dividend index by 34.7/14.2ppt. Looking ahead to 2026, although the bank believes that the rise of the sector still needs a shift in market risk appetite as a premise, the sector has the cost-effectiveness for configuration after the pullback. Shipping: Optimistic about structural opportunities, continue to pay attention to geopolitical impacts Structural differences in supply: Good for small container ships, oil tankers, finished oil MR ships, small bulk carriers. Based on the analysis and deduction of the average age of the global fleet and new ship orders, the bank concludes that the average age of the global container shipping, oil tanker, and bulk carrier fleet is 14.0, 13.7, 14.1, and 12.7 years respectively, which is higher than historical averages. Within each sector, there are also significant differences in different ship types. In general, due to the large-scale of container ships occurring after 2010, large ships are relatively new, while older ships are mainly concentrated in small container ships below 3000 TEU, for which new ship orders cannot replace ships over 30 years old exiting in the next five years. Oil transport and bulk carriers appeared earlier, and both large and small ships are aging to varying degrees. Since large oil companies have stricter requirements for VLCC ship conditions, the bank assumes that ships over 25 years old will be phased out by 2030, with negative growth expected in VLCC capacity. Optimistic about structural market opportunities, continue to pay attention to geopolitical factors. Shipping is optimistic about the tight supply opportunities of small container ships, especially those belonging to some private shipping companies, which have young fleets, competitive market positions, and high dividend ratios; oil transport is optimistic about the demand opportunities brought by OPEC's increased production for compliant VLCC large ships, as large state-owned oil transport companies have stable profit businesses and enjoy flexible freight rates. In addition, geopolitical factors have been influencing the shipping market for the past five years. Looking ahead, attention should still be paid to the trade or transportation structural changes that may be triggered by the Houthis' attitude after the halt of hostilities in Yemen, the resumption of navigation in the Red Sea; the disturbance of American 301 shipping port fees to shipping on the American line, and whether this will cause a butterfly effect; the effects of Western countries such as Europe and America's sanctions against Russia and Iran, changes in oil production locations, and the possibility of scrapping older ships. Air transport: Supply and demand structure expected to reverse, increased earnings flexibility from oil and exchange rate fluctuations By 2026, the industry's supply and demand structure is expected to gradually transition to a balance or even a situation where demand exceeds supply, reversing the oversupply situation in previous years, which may lead to an increase in ticket prices year-on-year. The bank forecasts an annualized growth rate of about 3% in industry supply (available seat kilometers) from 2026 to 2028, with demand (passenger revenue kilometers) growth expected to remain above 5%, the industry's supply and demand structure is expected to start to reverse from 2026, and then further optimize. From 2023 to 2025, the industry has maintained strong demand for private travel, and with economic recovery, demand for public and business travel is rebounding, providing further support for aviation demand growth. Engine issues will continue to limit the growth in the number of available airplanes in the industry in the coming years, combined with the fact that Boeing and Airbus production capacities remain tight, the industry's supply growth is low and has a high degree of certainty. Given that current passenger load factors are at historically high levels, the bank believes that the optimization of the supply and demand structure is expected to drive an increase in ticket prices. Oil prices may remain low, exchange rate fluctuations may be favorable, and increased earnings flexibility for airlines. OPEC+ increased production, a potential ceasefire agreement between Israel and Palestine, may keep international oil prices low; a rate cut by the US dollar may cause the renminbi to depreciate against the US dollar, possibly increasing the hedging income for airlines. The bank believes that changes in these external factors in 2026 may further increase the profitability of airlines. Airports: Operational leverage continues to show, but attention should be paid to duty-free and new production capacity The bank expects that in 2026, with the gradual recovery of passenger flows, operational leverage will gradually show, but the commercial logic of airports is still to be observed, and the sector's P/E ratio valuation needs to be digested. The bank expects further normalization of passenger traffic growth in the airport industry in 2026, especially the high growth rate of international routes, particularly in inbound tourist passengers, the recovery of passenger flows will further drive the operational leverage of airport companies, but it is also worth noting that the large-scale production capacity of some airports may lead to significant cost increases, dragging down profitability. It is recommended to pay attention to the progress of Guangzhou Airport Terminal 3 project, Shenzhen Airport's new runway, and the Xiamen new airport. The bank expects non-aviation businesses at airports to benefit from the increase in passenger flows, but the stabilization and increase in per capita consumption, especially duty-free average prices, still need to be observed, as Shanghai International Airport's duty-free rental performance this year remains weak. In addition, the bank recommends paying attention to the signing of rebate contracts for new duty-free contracts in Shanghai and Beijing at the end of 2025 and beginning of 2026.