GTHT Securities has released a research report maintaining an "overweight" rating on the aviation and oil shipping sectors. The report's key viewpoints are outlined below.

Aviation Sector

Despite high oil prices in May, the international segment remained profitable. In June, domestic aviation fuel prices were lowered as anticipated. The firm estimates that overall industry passenger traffic in May declined by approximately 10% year-on-year, with international traffic largely flat. The passenger load factor increased slightly by nearly 1 percentage point compared to the same period last year. High oil prices were the primary driver of significant fare increases and flight reductions, with domestic all-inclusive fares (including fuel surcharges) rising over 8% year-on-year. Demand during the May Day holiday was weaker than expected due to diversion from the spring break. Post-holiday, the ability to pass on oil price costs during the off-season was limited. With domestic aviation fuel prices up 111% year-on-year in May, industry-wide operational pressure increased. Domestically, major airlines benefited from resilient business and official travel demand, while carriers like Spring Airlines saw limited flight cancellations due to the price-comparison effect stimulating personal travel demand. Internationally, sustained sharp fare increases on China-Europe routes continued to support profitability for international routes, providing airlines like Air China with oil price hedging capabilities exceeding the industry average. The 15% reduction in domestic aviation fuel ex-factory prices in June aligns with the firm's earlier expectations, and the proportion of oil costs covered by domestic fuel surcharges has increased compared to May. Advance sales for the summer travel season have not yet commenced. Following the conclusion of national exams, the start of the summer peak is expected to see improved supply-demand dynamics and lower oil prices, which should enhance airlines' ability to pass through fuel costs. The combination of elevated oil prices and an off-season trough presents a rare contrarian opportunity.

Oil Shipping Sector

Setbacks in US-Iran negotiations and the slow recovery of Strait of Hormuz traffic do not alter the underlying demand for inventory replenishment or the optionality presented by changes in the "grey" market. In the short term, the recent diplomatic difficulties have led to a 5% week-on-week decrease in vessel transits through the Strait last week, though VLCC transits increased, mostly serving Iran. As market dislocations ease and freight rates decline, Chinese shipowners are expected to maintain operational efficiency above the industry average, with earnings still projected for strong growth in Q2 2026. Medium-term, global crude oil inventories have seen a record drawdown over the past three months. Should the Strait fully reopen, tanker capacity utilization is expected to return to high levels. Coupled with production increases, inventory rebuilding, and supply discipline, a period of high market prosperity could be sustained. The longer the Strait disruption persists, the longer the inventory restocking phase is likely to last. Long-term, a potential lifting of sanctions on Iran would shift its exports to compliant demand. The associated "shadow fleet" would struggle to transition back to the mainstream market, potentially creating a period of super-high market prosperity lasting several years for the compliant oil shipping fleet, offering upside for both earnings and valuations.

Container Shipping Sector

Liner companies have initiated a new round of announced rate increases, with the sustainability hinging on peak-season demand and capacity management discipline. Carriers have been actively raising rates since May, with cumulative increases of 50-65% on Europe and North America routes for the month. Recently, several lines have announced further rate hike plans for June, aiming to leverage the pre-peak window to repair freight rates, particularly to alleviate operational pressure on European routes amid high bunker costs. On June 5th, the SCFI index rose 6% week-on-week, with Europe routes up 3-5% and US routes up 8-10%. Short-term supply-demand improvements are expected to support the June increases. Firstly, the peak season appears to be starting early. Ongoing inventory rebuilding in Europe and the US, combined with some shippers front-loading shipments to avoid potential further rate hikes and tariff increases, is driving demand. Secondly, capacity is being actively managed. 2026 is expected to be a light year for large vessel deliveries, and Red Sea diversions continue. The Middle East situation is causing schedule disruptions and vessel delays, impacting port efficiency. Simultaneously, liner companies are actively implementing blank sailings and capacity cuts. As the wave of front-loaded shipments concludes, subsequent peak-season demand strength and the rigor of capacity control will be crucial for the sustainability of the rate increases.

The report concludes with risk warnings including economic fluctuations, geopolitical and oil price risks, tariffs, currency exchange rates, and safety incidents.