GF Securities: The turning point in the transportation industry is gradually emerging, suggesting attention to anti-involution and domestic demand recovery

According to the Zhitong Finance APP, GF Securities has released a research report stating that the anti-involution in the transportation industry and the recovery of domestic demand are two directions worth paying attention to. 1. Anti-involution: E-commerce express delivery and chemical logistics are expected to benefit from the overall implementation of anti-involution policies, with both express delivery prices and resource prices likely to bottom out and rebound, thereby improving the operations of related companies. 2. Recovery of domestic demand: ① Oil and bulk: High capacity utilization before the peak season may provide higher confidence for the elasticity during the peak season. ② Aviation: Tight supply combined with continuously declining oil prices is expected to further open up cost advantages for airlines.

The main viewpoints of GF Securities are as follows:

Shipping

Based on the financial data for the first and second quarters of 2025, the performance of various segments in the shipping market has become increasingly differentiated. Among them, the container shipping market shows a divergence in prosperity, special vessels perform well, while the oil and bulk market continues to face pressure. Looking ahead, in the short term, considering the high capacity utilization in the oil and bulk segments during the off-season in Q3 this year, the confidence in the elasticity of the peak season in Q4 is increasing, and peak season freight rates are promising. In the long term, the demand-side benefits for bulk shipping are gradually increasing, while there are no significant changes on the supply side, indicating that the long-cycle turning point may be approaching.

Logistics

In the first half of 2025, the express delivery industry was generally under pressure due to intensified competition, with companies showing slight differentiation based on their cost control capabilities. In the second half of the year, attention will be paid to the implementation of price increases, as the fourth quarter approaches the peak season, and price increases are expected to continue. In the first half of 2025, cross-border logistics and chemical logistics faced pressure on performance due to low industry prosperity and fierce competition; however, in bulk logistics, apart from large supply chain companies, the fundamentals of transportation and warehousing companies are under pressure. In the second half of the year, both chemical logistics and bulk logistics will focus on anti-involution policies, with chemical logistics companies experiencing a resonance between inventory and capacity cycles, and rising commodity prices driving improvements in bulk logistics operations.

Aviation

In the first half of 2025, aviation continued to see an increase in volume but a decrease in price. The decline in oil prices, combined with improvements in aircraft daily utilization, released cost advantages; however, ticket prices were under pressure, compressing profit margins. Major airlines saw improvements in gross margins, while private airlines experienced a slight decline in gross margins. On the cost side, in the first half of 2025, the renminbi appreciated by 0.41% year-on-year, an improvement compared to a depreciation of 0.62% in 2024, alleviating the overall foreign exchange loss pressure in the industry. In terms of profits, among the three major airlines, Air China and China Eastern Airlines significantly reduced losses, while China Southern Airlines increased losses by 305 million yuan. The performance of private airlines was differentiated, with China Express Airlines seeing a substantial year-on-year increase in net profit attributable to shareholders due to increased government subsidies, reaching 251 million yuan. Hainan Airlines turned losses into profits with net profit attributable to shareholders increasing to 57 million yuan, and Juneyao Airlines grew by 3.29% year-on-year. Spring Airlines saw a year-on-year decline of 14.11% in net profit attributable to shareholders due to tax shield effects. Overall, the profit performance trend of the entire industry is improving, aligning with market expectations for steady recovery in the industry. Airports: Passenger flow at first-tier airports is steadily recovering, especially for international routes, driving continuous year-on-year recovery in revenue and profits for various airports in the first half of 2025.

Infrastructure

Second-tier targets have shown structurally better-than-expected performance, awaiting a bottoming rebound in bulk trade service nodes. In terms of highways, first-tier companies generally met expectations, and the performance recovery of Yuexiu Transportation Infrastructure has begun; the weak recovery of traffic on highways has started, with developed regions showing stronger resilience under differentiated traffic flow. First-tier port targets maintained stable performance in Q2; under the backdrop of slowing growth in passenger and cargo demand, the net profit attributable to shareholders of Guangshen Railway increased by 75% year-on-year in Q2 Risk Warning: Significant economic fluctuations, geopolitical conflicts, deep recession in Europe and the United States, substantial volatility in oil and exchange rates, large-scale natural disasters, etc