HK Stock Market Move | Afternoon drop in aviation stocks expands, with fluctuations in China-Japan routes. Institutions believe short-term overall impact is controllable.

Aviation stocks fell in the afternoon, with China Eastern Airlines (00670) down 4.93% to 4.63 Hong Kong dollars; China Southern Airlines (01055) down 4.38% to 5.24 Hong Kong dollars; Capital Airport (00694) down 2.42% to 2.82 Hong Kong dollars; Air China Limited (00753) down 1.82% to 6.47 Hong Kong dollars. In terms of news, on November 14, the Ministry of Foreign Affairs reminded Chinese citizens to avoid traveling to Japan recently, and several major airlines subsequently announced that tickets for Japan routes before December 31 can be refunded or changed for free. Dongxing believes that due to the large passenger flow on Japan routes, airlines with a high proportion of Japan routes in their international routes may be impacted in the near future. Huatai, on the other hand, stated that there may be fluctuations in the short-term China-Japan routes, but we believe that the overall short-term impact is manageable. According to CAPA data, as of October, China-Japan routes accounted for 2.8% of the overall ASK in China over the past 25 years, and airlines may mitigate the impact by adjusting route allocations.