Zhongjin: Focus on transport and port stocks, dividend stocks, and assets with improved cash flow in the second half of the year.

The research report of China Gold Corporation believes that in the first half of 2025, the transportation sector will show the characteristics of small stocks outperforming large stocks, and H-shares outperforming A-shares. On the one hand, this reflects the lower valuation and higher dividend yield of H-shares, as well as frequent thematic market trends. In the second half of the year, it continues to recommend optimism towards Hong Kong stocks and focus on two types of opportunities. Firstly, allocation based on dividends, especially free cash flow, including: 1) traditional high dividend sectors, bullish on targets with expected fundamental differences and low valuations; 2) container shipping, bullish on the Asian and domestic container shipping markets, with favorable short-term and long-term logics; 3) improvement in free cash flow, expected increase in future shareholder returns. Secondly, pay attention to sectors that may experience marginal changes in the second half of the year and currently have low valuations and expectations, such as: 1) logistics, focusing on new technologies, markets, and models; 2) oil shipping, with production increasing first and exports increasing later, the peak season starting in the fourth quarter; 3) franchised express delivery, achieving a new balance among regulatory, platform, and market factors, with easing competition margins likely to bring about valuation restoration; 4) aviation, improvement in ticket prices combined with a decrease in fuel costs, leading to a significant year-on-year increase in profits.