Guotai Haitong: Maintain "buy" rating for aviation and oil transportation, shipping companies actively announce price increases.

Guotai Haitong releases research report, maintains recommendation to increase holdings in aviation fuel transportation. 1) Aviation: Oil prices remain unchanged in the long super cycle logic, ticket prices are market-oriented with low supply growth, boosting consumption will help supply and demand continue to improve. It is a rare opportunity for a contrarian approach. 2) Oil transportation: Has entered a super bull market in two phases, with China's fleet advantage highlighted under trade disorder. The situation in the Middle East will provide opportunities for supple market corrections and changes in the gray market, expecting very high prosperity. Guotai Haitong's main points are as follows: Aviation: International airlines maintain profits in May despite high oil prices, and domestic aviation fuel prices are lowered as scheduled in June. The industry estimates a decrease of about 10% in passenger flow in May year-on-year, with international levels remaining stable; seat occupancy rate slightly increasing by nearly 1 percentage point year-on-year; dominated by high oil prices, international ticket prices sharply increase with flight reductions, domestic ticket prices including oil increasing by more than 8% year-on-year. Demand during the Labor Day holiday was weaker than expected due to the diversion of spring break, and the ability to transmit lower seasonal oil prices after Labor Day is limited, with domestic aviation fuel prices rising by 111% year-on-year in May, putting pressure on the industry's operations. Domestic: Major airlines benefit from public and business travel resilience, spring and autumn benefit from private demand due to price effects, with limited flight cancellations. International: Major increase in ticket prices on China-Europe routes continue to support profitability on international routes, providing hedging capabilities beyond the industry's oil price for airlines such as Air China. The ex-factory price of domestic aviation fuel was lowered by 15% in June, in line with the bank's expectations; the coverage ratio of domestic fuel surcharge over oil prices increased compared to May. The pre-sale of the summer peak season has not yet started, and it is expected that the end of the college entrance examination will trigger summer peak season demand and oil price declines, ensuring an increase in the transmission of airline fuel prices. High oil prices combined with off-peak season provide a contrarian opportunity. Oil transportation: Negotiations between the US and Iran are back and forth, slow restoration of the Strait, providing opportunities for increased demand for storage and changes in the gray market 1) Short term: US-Iran negotiations have stalled, with a 5% decrease in maritime traffic through the Strait of Hormuz last week, with an increase in VLCC passing, and more serving Iran. Disruption easing and lower freight rates are expected; Chinese shipowners are expected to operate more efficiently than the industry, with high growth expected in the second quarter of 2026. 2) Medium term: Record low global crude oil inventories in the past three months. If navigation in the Strait resumes, oil transportation capacity utilization will return to a high level, combined with increased production for storage replenishment and long Jin control, high prosperity is sustainable. The longer the blockade in the Strait, the longer the storage replenishment will persist. 3) Long term: If Iran sanctions are lifted, its exports will turn into compliant demand, shadow fleets will find it difficult to follow suit, and oil transportation will experience very high prosperity that can sustain for several years, providing a dual space for performance valuation. Container shipping: Shipping companies have launched a new round of rate increases, seasonal demand and cabin control will determine sustainability Shipping companies have actively raised prices since May, with European and North American route prices rising by 50-65% in May. Recently, several shipping companies have successively announced new rate increase plans for June, actively repairing prices before the peak season window, especially to alleviate operational pressures on European routes under high oil prices. On June 5th, the SCFI rose by 6% month-on-month, with European routes rising by 3-5% and American routes rising by 8-10%. Short-term supply and demand improvement is expected to support price increases in June. 1) Early start of peak season. Europe and the US continue to replenish stocks, while some cargo owners concentrate on shipping to avoid further price increases and risks of tariff increases in the future. 2) Capacity control reductions. 2026 is a year of fewer large ship deliveries, and the rerouting through the Red Sea continues; Middle East turmoil leads to scheduling disruptions and vessel delays, impacting the efficiency of some ports; at the same time, shipping companies actively reduce flights and control cabins. As the concentrated shipping ends, the subsequent peak season demand and cabin control intensity will be key to the sustainability of price increases. Risk warning: Economic fluctuations, geopolitical oil prices, tariffs, exchange rates, safety accidents, etc.