Morgan Stanley published a research report on the transportation industry in mainland China and Hong Kong, stating that under the backdrop of a still soft macro outlook, the impact from the supply side is believed to be more significant. They still believe that this year the market faces more opportunities than risks, focusing on airline supply chain constraints, compliance capacity tightness in the tanker transportation industry, and the progress of market consolidation in the express delivery industry. Additionally, Morgan Stanley also believes that the container shipping industry faces concerns over supply surplus, which may pose certain risks.
Morgan Stanley believes that the aviation industry will be driven by the recovery of business travel, longer flight routes, and product mix upgrades, as well as growth in outbound tourism and inbound tourism. Anti-involution policies, the appreciation of the RMB, and low oil prices also provide support for the industry's fundamentals, giving "Overweight" ratings to Air China (00753.HK), China Eastern Airlines (00670.HK), China Southern Airlines (01055.HK), and Spring Airlines (601021.SH), with target prices of HKD 8.11, HKD 4.31, HKD 5.33, and RMB 62.4, respectively.
Regarding shipping stocks, Morgan Stanley pointed out that escalating geopolitical tensions are driving the tanker upcycle, and under the evolving geopolitical dynamics, the market demand for compliant tankers is increasing. They maintain a cautious view on the continuously oversupplied container shipping sector, relatively bearish on COSCO Ship Hold (01919.HK) and Orient Overseas (00316.HK), with a "Underweight" rating; while giving "Overweight" ratings to COSCO SHIPPING Energy (01138.HK) and China Merchants Energy Shipping (601872.SH).
As for the express delivery industry, Morgan Stanley is focused on the progress of industry consolidation, expecting ZTO Express (ZTO.US) and YTO Express (600233.SH) to gain more market share in the domestic market, giving an "Overweight" rating; while in the overseas market, Morgan Stanley believes that J&T Express (01519.HK) can also enhance its market share in its operating regions, rating it "In line with the market."