Affected by the low international oil prices, the strong trend of the renminbi, and the coming of the summer tourist season, aviation stocks that are about to enter the “peak season†will usher in the “best†investment environment.
From the performance of the secondary market, investors have already placed the market for the upcoming peak season of aviation stocks. According to statistics from the Red Journal, the airport shipping sector has increased by 8.16% in the past month, while the Shanghai index has only increased by 3.16. %. Among them, Baiyun Airport, China Southern Airlines, Xiamen Airport and other stocks rose more than 10% in the past month.
In this regard, industry insiders said that due to the positive impact, it is expected that the demand for travel at home and abroad will increase significantly in the near future. This year's aircraft fare improvement rate may exceed expectations, and the aviation stock market may be expected in the peak season. Investors are advised to focus on the performance of the tourist city's airport peak season and the aviation stocks whose non-airline revenues are expected to exceed expectations.
Multiple positive catalysts, aviation stocks will arrive in the peak season
Compared with the recent downturn in the market, the recent performance of aviation stocks is remarkable. In the eyes of the industry, the factors affecting airlines mainly come from three aspects, namely supply and demand structure, oil price and exchange rate. From the current market point of view, the oil price exchange rate has recently formed a co-resonance that is conducive to the performance of airlines. With the advent of the summer tourist season, the investment environment of aviation stocks can be described as "friendly."
Wu Yifan, an analyst at Huachuang Securities, said that some airlines were affected by the sharp increase in oil prices, and their financial data for the first quarter was affected. The relevant data will be improved after the second quarter. Regarding the RMB exchange rate, he analyzed that the strength of the renminbi can not only bring exchange gains to airlines, but also stimulate outbound travel, which is obviously beneficial to airlines.
Recently, the renminbi has strengthened, and even if it does not consider appreciation, the exchange rate will be greatly improved this year. According to estimates, if the average annual oil price drops by 1% on the basis of USD 55/barrel, the net profit of Air China, China Southern Airlines and China Eastern Airlines will increase by 2.4%, 3.7% and 2.5% respectively. If the RMB depreciation against the US dollar is reduced by 1 %, the net profit of Air China, China Southern Airlines and China Eastern Airlines increased by 4.2%, 4.9% and 5.1% respectively.
From the point of view of fare and passenger load factor, industry insiders said that with the coming of the summer tourist season, double-up can be expected. The data shows that the passenger load factor of Air China and China Southern Airlines has increased for the first time in a row for nine months. Its passenger flight rate in April this year was the highest in the past three years. It is expected that the passenger load factor will stabilize at more than 85% from July to August. In terms of fares, Guobao Securities analyst Su Baoliang said that benefiting from the high passenger load rate in the previous period, the fare level continued to strengthen. With the end of the college entrance examination and the arrival of the summer vacation, the summer season bookings were in good condition, and student flow and family travel demand will be Welcome to a new round of peaks, this year's fare improvement is expected to exceed expectations.
In terms of industry, according to the statistics of Huachuang Securities Research and Research, from 2005 to 2016, the aviation industry's revenue increased from 140 billion yuan to 469.5 billion yuan, with a compound growth rate of 11.6%, and the total profit increased from 5 billion yuan to 36.5 billion yuan. The growth rate is as high as 19.8%, and the development trend of the industry is improving. Haitong Securities Research reported that the airport has benefited from the positive aviation market, and the indices rebounded significantly from last year. In terms of hub airports, the inbound and outbound flights of Pudong, Hongqiao, Guangzhou and Shenzhen airports increased by 12.0%, 9.8%, 11.2% and 14.8%, respectively; the corresponding inbound and outbound passenger traffic increased by 13.4%, 14.3%, 9.5% and 13.3 respectively. %. The completion of the runway maintenance at the Capital Airport has gradually returned to normal operation and the capacity is gradually recovering. The number of flights increased by 7.6% year-on-year, and the number of passengers entering and leaving the port increased by 7.1% year-on-year.
From the latest conclusion of the International Air Transport Association on the profit prospects of the global air transport industry in 2017, it is estimated that the global airline's net profit will reach 31.4 billion US dollars, higher than the previous forecast of 29.8 billion US dollars, industry revenue will reach 743 billion US dollars, Higher than the previous forecast of 736 billion US dollars. IATA estimates that passenger demand is expected to grow by 7.4% this year, with growth rates unchanged from 2016. Strong demand means passenger traffic will increase by 275 million passengers compared to 2016. It is estimated that the total passenger traffic this year will reach 4.1 billion passengers, which will be the largest year-on-year increase in passenger traffic.
Optimistic about the performance of the tourist city airport peak season
Judging from the trend of aviation stocks in the past, the probability of achieving excess returns for airline stocks from June to August is relatively high. In the logic behind it, industry insiders said that after the net profit in the fourth quarter of the previous year and the first quarter of the year, the bottom line is improved and the second quarter is often the off-season, but out of the passenger load factor, fare and aviation. The future development of the stock market is optimistic. Investors are expected to be more optimistic about the aviation stocks in the third quarter. The stock price of aviation stocks in the secondary market will usually have a good performance.
For the next investment opportunity, Hainan Securities transportation industry analyst Yan Nan believes that after the end of the college entrance examination, the tourism market will gradually heat up, after the superimposed primary and secondary school students and college students summer vacation, the performance of the tourist city airport peak season is worth looking forward to.
Niu Yongtao, an analyst at Lianxun Securities, also said that the college entrance examination has ended last week. After the college entrance examination, the peak of travel and vacation will be ushered in. The airport is the preferred method for long-distance travel. It is about to usher in the summer peak season and strongly recommend aviation + Airport combination. According to its analysis, on the one hand, the recent increase in oil prices has narrowed, and the renminbi has entered the appreciation channel to reduce costs. On the other hand, the aviation economy is at a high level, and the aviation season is coming soon. It is recommended to pay attention to Air China and China Southern Airlines. In addition, the airport fee has been changed, and the superimposed airport business is entering the development stage of large-scale composite hub. Non-airline revenue is expected to increase its contribution to performance beyond expectations. Baiyun Airport and Shanghai Airport are recommended, and Shenzhen Airport is concerned.
Chang Tao, an analyst at China Merchants Securities, believes that since the beginning of the year, aviation demand has continued to diversify. The demand for domestic high-quality routes and international European and American lines has improved significantly. With the advent of the peak season, the profitability of internal lines has gradually released. It is recommended that China Airlines, which has a relatively high internal line, pay attention to Air China. Affected by market preference switching, as well as airport charges and tax-free re-tendering, the airport sector has seen significant excess returns. It is recommended that Baiyun Airport, which has a higher-than-expected 2018 performance, should focus on Shanghai Airport.
"The current market generally expects oil prices to be difficult to rise, the exchange rate of the renminbi against the US dollar has stabilized and rebounded, the aviation market has become more bearish, the profits are more frequent, the demand is strong, and the high ticket prices and high passenger load factor are driving. The performance of airlines will continue to rise." Su Baoliang analyzed .
In terms of investment opportunities, he suggested to explore from two aspects: First, the benchmarking of the US aviation industry, profit improvement directly promoted the valuation of the airlines. At present, the US oligopoly airlines PB valuation is more than 2.9 times, China's airlines still There is a large valuation to repair the space. It is recommended to pay attention to China Southern Airlines. The reason is that China Southern Airlines has a domestic market share of 70%. It is the biggest beneficiary of the domestic aviation market. At the same time, it introduces strategic investment of American Airlines, which has a major positive impact on the international line business. In addition, Air China, which has the absolute advantage in Beijing hub and complete international route layout, is also worthy of attention. It adopts a price priority strategy and will fully enjoy the performance improvement brought by the fare recovery when the peak season arrives. It is worth noting that Air China’s The PB valuation is the lowest among the three major airlines.
Second, the airport industry's fee-based market reforms have increased their performance, and the duty-free shops have exceeded their expectations. The non-airline revenue performance of first-line airports has raised expectations. Large-scale hub airports show a trend of shifting to aviation cities. The conversion of performance engines and the increase in fees and charges are expected to jointly promote the valuation. It is recommended to pay attention to Shanghai Airport and Shenzhen Airport. Among them, Shanghai Airport is an airport leader with abundant production capacity and strong profitability. A new round of tax-free tenders is worth looking forward to. If the deduction rate is raised to 45%, the profit elasticity of the first year will exceed 30%. In terms of Shenzhen Airport, the internationalization development momentum is rapid; the domestic routes account for more than 90%, and the internal airline price increase is the most flexible for the company's profit.
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