Cathay Pacific Haitong: Maintaining the “Gain” Ratings for Aviation and Oil Transportation, the Industry Expects the High Oil Transport Prosperity to Be Sustainable in the Medium Term

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report stating that it will maintain the increase in aviation oil transportation. 1) Aviation: Geo-oil prices will not change the logic of long supercycles. High oil prices, 10 high passenger occupancy rates+low ticket prices+low stock prices, focusing on the timing of aviation's bottom layout. 2) Oil transportation: The opening of dark air has driven recent freight rates to record highs, and geopolitical conflicts have strengthened medium- to long-term logic. Continue to focus on recommendations. The industry expects that the geopolitical conflict may continue, that the loss of tanker operating efficiency will continue, and that inventory replenishment can be expected in the next two years. It is expected that the high oil transportation boom will continue in the medium term, and there will also be unexpected upward options in Iran's compliance requirements for lifting the ban. Recently, one-year and three-year leases have risen to 300,000 US dollars/day and 110,000 US dollars/day, reflecting the industry's optimistic expectations in the medium term, and will guarantee that oil transportation companies' dividends will attract and support the lower valuation limit. Remind oil transportation to recreate a good layout opportunity.

Cathay Pacific Haitong's main views are as follows:

Aviation: Airline operators control flight insurance, and the public demand at the exhibition guarantees that the price of fuel-containing tickets continues to rise year-on-year.

The airline continued its policy of controlling the price of classes during the off-season, making positive improvements compared to the summer travel strategy. The bank estimates that airline passenger flow fell by about 5% year on year in mid-late October, and passenger flow on international routes maintained positive growth; passenger occupancy rates declined slightly year on year, and airlines lowered passenger occupancy targets; estimates that domestic fuel ticket prices have maintained a marked year-on-year increase, and recent exhibitions guarantee strong public demand. It is expected that the Singapore Airlines Season will continue to rationally reduce flight operation rates and increase fuel prices through ticket prices. Under high oil prices in 2026Q3, demand from the public sector was weak, and the increase in airline capacity investment in exchange for price in exchange for volume put pressure on industrial operations. Reminder that the geographical oil price will not change the airline's logic. Currently, it is at a high level of oil price+high passenger occupancy rate+low ticket price+low stock price. The fall in oil prices will open up the profit center and the long-term logical interpretation, and focus on the timing of the bottom layout.

Oil transportation: Iran's attacks are compounded by high freight rates to curb demand, and the industry expects the high boom to be sustainable in the medium term.

In September, Dark Air opened up crude oil exports to the Middle East and basically recovered. The STS overpass caused a significant drop in tanker operating efficiency and siphon capacity, causing supply shortages in the Atlantic market. Oil freight rates have now soared to an epic level. Since October, Iran's intensified attacks have affected the volume of dark air cargo. At the same time, high freight rates in the US Gulf have begun to have an impact on the pace of refinery procurement. The TCE for the Middle East Oman/US Gulf/West Africa route has dropped by about 20% month-on-month to US$66/55,444 million. The industry expects that the geopolitical conflict may continue, that the loss of tanker operating efficiency will continue, and that inventory replenishment can be expected in the next two years. It is expected that the high oil transportation boom will continue in the medium term, and there will also be unexpected upward options for Iran to lift the ban. Recently, one-year and three-year leases have risen to 300,000 US dollars/day and 110,000 US dollars/day, reflecting the industry's optimistic expectations in the medium term, and will guarantee that oil transportation companies' dividends will attract and support the lower valuation limit. Remind oil transportation to recreate a good layout opportunity.

Shipbuilding: In October, the inversion between used VLCC ships and new ships deepened, and the industry generally expected that the aging of VLCCs would hedge against the pressure on new ships.

Last week, the Ministry of Industry and Information Technology released domestic shipbuilding data for the first three quarters of 2026. In the first three quarters of 2026, China's shipbuilding completed, new orders, and handheld orders accounted for 63.6%, 81.8%, and 72.4% of the global market share, respectively. Domestic shipbuilding continues to dominate the global market, and the global share is expected to increase further. In mid-October, Hengli Heavy Industries signed an order for 12 tankers. Of these, the average price of 6 VLCCs is nearly 140 million US dollars. Currently, it ranks first in the world with orders for nearly 70 VLCCs. Currently, the 15-year-old VLCC used ship price exceeds 160 million US dollars, and the inversion with the new ship price deepens, reflecting the industry's optimistic expectations that the immediate market will continue to be booming.

The boom in oil transportation continues to drive up tanker asset prices and shipbuilding demand. At the same time, the expansion of shipyard production capacity is still constrained by shipyards, engines, and personnel support. The continuation of the boom in the shipbuilding market will be significantly better than the previous shipping cycle. The market is concerned about the pressure to deliver new VLCC tankers in the next few years. The industry generally believes that the accelerated aging of VLCCs and the difficulty of returning the shadow fleet to the compliant market will effectively hedge the pressure to deliver new ships, and that the supply rigidity of tankers will continue.

Risk warning: economic fluctuations, geographical oil prices, tariffs, exchange rates, safety incidents, etc.