Where to Focus

In the second quarter of 2026, the transport industry is displaying notable divergence. In shipping, oil tanker rates saw a temporary rise, driven by US-Iran tensions, supply constraints, and improving demand. Container shipping benefited from export growth, geopolitical risks, and better supply-demand balances, leading to a sustained increase in freight rates. The dry bulk shipping market is also showing an upward trend, with improved vessel operating efficiency. Ports are seeing steady throughput growth, supported by foreign trade and container shipping, with port companies expected to see stable profit increases.

Railway and highway transport demand remains robust. Railway passenger and freight volumes continue to grow, while ticket pricing reforms are boosting passenger revenue flexibility. Highway passenger transport is steadily recovering, and freight transport maintains strong resilience. In aviation, passenger demand is recovering, and airlines are increasing capacity, but rising jet fuel prices in the second quarter are temporarily squeezing profit margins. Airport cargo performance is outperforming passenger services, as international air logistics demand continues to improve. In the express delivery and logistics sector, parcel volumes are growing, and anti-internal-competition policies are easing price wars, improving per-unit revenue and gradually increasing profit potential.

Key Supporting Points

In the shipping and port sector, the second quarter of 2026 saw an upward trend across various sub-segments. Oil tanker shipping was impacted by geopolitical tensions, with risk premiums driving volatile rises in VLCC freight rates. Combined with slower supply growth, oil tanker companies delivered strong profits. Container shipping benefited from high export growth, geopolitical disruptions, and improved supply-demand dynamics, with major route freight rates rising sharply and corporate profits recovering quarter-on-quarter. The dry bulk shipping market is improving, with better vessel operating efficiency. The port industry remains broadly stable, with a recovery in foreign trade supporting steady throughput growth, and container business performing particularly well, highlighting the sector's earnings stability.

In the aviation and airport sector, a sharp rise in jet fuel prices in the second quarter significantly squeezed airline profit margins, putting pressure on the industry's overall profitability. Air China is expected to post a loss in the first half of the year, due to cost pressures. The airport sector is showing mixed performance, with overall passenger growth slowing. However, cargo business, supported by the recovery of international routes, is maintaining high growth. Airports with strong cargo advantages are showing greater earnings resilience, such as Shenzhen Airport, which expects a significant year-on-year increase in first-half profits.

In the railway and highway sector, operations remained broadly stable in the second quarter. The recovery of passenger rail travel has driven volume growth, and with the implementation of ticket pricing reforms, passenger revenue flexibility has improved. Freight structure is being optimized, with high-value-added container freight growing rapidly, supporting stable industry profits. The highway transport market is operating smoothly, with passenger transport continuing to recover alongside travel consumption. Freight demand remains resilient, supported by the manufacturing sector and bulk commodity logistics, maintaining overall industry stability.

In the express delivery and logistics sector, the second quarter saw synchronized growth in parcel volumes and unit prices. Under the regulation of anti-internal-competition policies, low-price, disorderly competition has eased. Unit prices have recovered year-on-year, and industry profit quality is steadily improving. With price recovery and structural optimization, revenue and profits are experiencing significant growth. The industry is moving away from a vicious price war, with a clear trend of profit recovery.

Investment Recommendations

Focus on investment opportunities in the expressway sector. Pay attention to the summer travel season aviation and high-speed rail sector. Recommend specialized transport companies benefiting from China's high-end manufacturing exports. Continue to monitor oil tanker and container shipping opportunities arising from the evolving Middle East situation. Watch for opportunities in the dry bulk shipping sector, given the upward trend in the BDI index. It is recommended to capture the trend-based investment opportunities in the low-altitude economy and autonomous driving sectors. Recommend investment opportunities in express delivery logistics expanding into international markets. Focus on themes like cross-border e-commerce logistics and engineering logistics going global.

Risk Factors

Risks include significant volatility in shipping rates, weaker-than-expected air travel demand, intensified price competition in express delivery, and changes in transport policy.