Western: Express delivery is opposing the trend of overwork, with a shortage in oil transportation supply and the long-term strategic value of aviation configuration.

Western released a report stating that the express delivery industry continues to resist overwork, and there is still room for price increases; Most companies in Q1 2026 have recorded good performance growth, improving profitability. In the oil shipping industry, as of 2026, the market fundamentals remain stable, and freight rates continue to rise. With the escalation of military conflicts in the Iran region, freight rates have soared again. From 2026 to 2029, the potential number of scrapped ships for various types of oil shipping industry exceeds significantly the number of new ship deliveries. In Q1 2026, the number of civil aviation flights and passenger traffic in China continued to grow steadily, but high oil prices may disrupt profitability in 2026. Western's main points are as follows: Express Delivery: Continued resistance to overwork, driving improvement in industry profitability (1) In Q1 2026, the express delivery industry processed 47.73 billion parcels, a year-on-year increase of 5.8%, with growth slowing to single digits. (2) 2025 was the starting year for a new round of "anti-overwork" in the Chinese express delivery industry, and 2026 is a continuation year for the comprehensive deepening of the anti-overwork policy, showing effective results and reshaping the landscape. In 2026, the "Guangdong Province Express Delivery Regulations were announced, which for the first time in the country included "prohibition of competition below cost price" in local regulations, further solidifying the foundation for the continuation of anti-overwork policy. In March and April 2026, several provinces across the country experienced a new round of express delivery price increases. (3) Referring to the experience of 2021, there is still room for price increases in express delivery. (4) Most companies recorded good performance growth and improved profitability in Q1 2026. Oil Shipping: Conflicts in the Middle East and supply gap resonate, short-term and long-term prosperity overlaps (1) In 2026, the oil shipping market fundamentals remain stable, and the freight rate center continues to rise. With the escalation of military conflicts in the Iran region, freight rates have soared once again. (2) The global supply-demand pattern of crude oil is in a continuous changing process, with the center of oil consumption shifting from Europe and America to Asia, and the center of oil supply shifting from the Middle East to Atlantic China, leading to longer transport distances. The bank expects that in the coming years, transportation distance will still be a positive factor for oil shipping demand. (3) According to Hafnia's investor exchange materials for mid-2025, sanctioned oil tanker capacity reached a historical high since 2012. According to COSCO Shipping Energy Transportation's 2025 annual performance presentation materials, Since 2026, compliant market crude oil trade has increased from Venezuela and India, highlighting the supply gap in the compliant oil transportation market. (4) According to Hafnia's mid-2025 and Q4 investor exchange materials, the cumulative shipping capacity of new ship orders for all types of vessels in the oil shipping industry from 2025 to 2028 is 114 million deadweight tons, while the cumulative capacity of old ships that may be scrapped from 2025 to 2028 reaches 167 million deadweight tons. From 2026 to 2029, the potential number of scrapped ships for various types of oil shipping industry significantly exceeds new ship deliveries. Aviation: Short-term profitability may be disrupted by high aviation fuel prices, for long-term investment value (1) In Q1 2026, the number of civil aviation flights in China continued to grow steadily. (2) In Q1 2026, passenger traffic increased by 6.5% year-on-year, exceeding the growth in flight volume. (3) In Q1 2026, the overall passenger load factor of various airlines remained at a high level. Listed airlines were profitable across the board in Q1 2026, the first time in nearly six years. (4) In March 2026, due to factors such as the escalation of conflicts in the Middle East and disruptions in shipping in the Strait of Hormuz, Brent crude oil rose from $72 per barrel to $118 per barrel (+63%), and FOB Singapore aviation coal prices briefly exceeded $200 per barrel, reaching a new high in recent years. High oil prices or disruptions may affect profitability in 2026. (5) From a historical perspective, the aviation industry is expected to experience an 8-year period of low supply growth for the first time, reaffirming its long-term investment value. Risk alert: The speed at which the market share of leading express delivery companies increases is too slow, the price competition in the express delivery industry is fierce, and the effects of consumer policies do not meet expectations, etc.; Oil tankers are affected by increased uncertainty in overseas economies, demand for oil tanker transportation recovers less than expected, and risks from geopolitical, trade environment, and exchange rate fluctuations, etc.; Uncertainty in profitability brought by high aviation fuel prices; Low-than-expected off-season air travel demand.