GTHT has released a research report maintaining its "overweight" rating for both the aviation and oil tanker shipping sectors.

1) Aviation: The long-term logic of a "super cycle" remains promising. With ticket prices market-oriented and supply growth low, boosting consumption will help drive continued improvement in supply and demand. Investors should seize bottom-fishing opportunities.

2) Oil Tanker Shipping: If the Strait resumes normal operations, tanker supply and demand will return to high levels. An Iranian sanctions relief would likely create ultra-high and sustainable prosperity. The repeated fluctuations in geopolitical conflicts do not alter the medium-to-long-term logic, and attention should be paid to contrarian timing.

GTHT's key views are as follows:

Aviation: Summer Peak Arrives, "15th Five-Year Plan" to Deepen Anti-Involution and Ensure Low Supply Growth

The summer travel season in early to mid-August will see the peak passenger flow. The reduction in fuel surcharges will help release demand for family travel, with daily ticket sales recently hitting a record high. It is estimated that passenger traffic in the first week of August grew over 7% year-on-year, with domestic load factors reaching around 90%. The year-on-year decline in domestic airfare including fuel has narrowed to single digits.

In August, the domestic jet fuel ex-factory price is 7,581 yuan, up 34% year-on-year and down 6% month-on-month. Considering the average Singapore jet fuel price rose over 10% month-on-month in July, it is speculated that the NDRC will reduce jet fuel prices in August, which will ease the operating pressure on airlines. It is expected that airline operations will improve significantly in August.

The "15th Five-Year Plan" for civil aviation emphasizes a "unified domestic market" and aims for "effective improvement in quality and reasonable growth in quantity." The report believes this will further deepen anti-involution, ensuring low supply growth. Future demand growth will drive the long-term logic of continued improvement in supply and demand and a rising profit center. Investors should focus on timing for bottom-fishing in the aviation sector.

Oil Tanker Shipping: Conflict Easing Raises Hopes for Resumed Negotiations, Limited Cargo Volumes Fails to Sustain Freight Rate Increases

Last week, VLCC transit volumes through the Strait of Hormuz and the Bab el-Mandeb Strait remained low. On August 2, US President Donald Trump signaled a pause in a new round of military action against Iran, raising expectations for a potential reopening of the shipping lanes. The specific implementation of this remains to be monitored. Short-term geopolitical conflicts continue to affect tanker demand, with limited new cargo volumes from the Middle East and the US Gulf. VLCC TCE rates on the US Gulf and West Africa routes saw slight declines but remain close to one-year time charter levels.

In the medium term, industry players believe the Strait may not fully recover in the second half of the year, but a recovery by early 2027 remains possible. If the Strait reopens, tanker capacity utilization will return to pre-conflict highs, and long-term controlled supply and restocking will further boost the market.

In the long term, if the US lifts sanctions on Iranian oil, the compliant tanker market could achieve ultra-high prosperity lasting several years. Geopolitical tensions have eased somewhat, with the US and Iran potentially restarting negotiations.

Half-Year Highlights: Cathay Pacific's Profit Surges, Benefiting from Spillover Middle East Passenger Traffic

Cathay Pacific reported a net profit of HK$6.2 billion in the first half of 2026, a significant 71% year-on-year increase. Excluding HK$900 million in fuel hedging gains and HK$1.4 billion in non-recurring items, the profit still grew about 21% year-on-year, exceeding market expectations. The report estimates that the company fully passed through fuel costs in the first half, better than the 80-90% pass-through rate of mainland Chinese airlines. The firm believes this is primarily due to the company fully benefiting from the spillover of transit passenger traffic from the suspended Middle East hubs. Cathay Pacific has ample flight rights to Europe and the US, and Hong Kong's advantageous transit hub location for routes such as India to the US and Australia to Europe/UK. In Q2, passenger volume and yields on these routes both increased, driving the company's first-half ASK up 12% year-on-year, load factor up 2.7 percentage points to a record 87.5%, and passenger revenue up 9% year-on-year. Similar positive international effects were also reflected in the Q2 operations of large mainland Chinese airlines. China's "15th Five-Year Plan" for civil aviation emphasizes "enhancing the function of international aviation hubs." Policy momentum, combined with visa-free benefits and the regulator's strict control over local subsidies for international routes, suggests that the long-term profitability of international routes is set to improve.

Risks: Economic fluctuations, geopolitical oil prices, tariffs, exchange rates, and safety incidents.