Modest Growth in Transport Performance

As the global economy enters a period of low growth, China's economy will grow moderately.

Aviation: It is expected that the appreciation of the RMB against the U.S. dollar in 2013 will be 0.3%, which will have little impact on the exchange earnings of the four major airlines. Global crude oil demand growth rate of 1%, airline jet fuel costs decreased by about 3% year-on-year. The aviation industry has obvious attributes of consumption upgrades. It is recommended to enjoy a consumption upgrade dividend on a distressed layout, and pay attention to the investment opportunities brought by the economic recovery, consumer rebound and falling oil prices.

Airport: It is expected that airport passenger throughput growth will rebound slightly in 2013, reaching 10%. The merger of domestic and foreign airlines charges will increase the profit of the sector by about 12%, which will become an important catalyst for the rise in share prices. The airport industry has excellent defensive capabilities and can carry out long-term deployments. However, under the background of economic recovery, it is more difficult to outperform the broader market.

Shipping: In 2013, the supply capacity of dry bulk carrier market continued to slow, and the gap between supply and demand grew from negative to positive, showing signs of improvement. The growth rate of oil tanker capacity above 10,000 tons will reach 3.3%, falling for two consecutive years, contradiction between supply and demand in the oil transport market. It will ease; the container shipping market will be weakly balanced and supply and demand will improve.

Port: In 2013, the port growth rate will rebound slightly. It is expected that the growth rate of cargo throughput will be around 9-12%, the growth rate of foreign trade cargo throughput will be around 10-13%, and the container throughput growth rate will be around 11-14%.

Valuation of port industry is not attractive, future performance flexibility

Highways: The toll free policy for highway major holidays will bring about 2-3% of the revenue impact and 4-9% net profit to listed expressway companies. There is limited space for the toll reduction of highways.

Railway: Under the background of steady growth of the government, the trend of the slow recovery of the fundamentals of the railway industry will continue. Concerned about the increase in the volume of railway freight traffic brought about by the economy, and the investment opportunities brought about by the reform of investment and financing of the Ministry of Railways and the reform of the city and the DPRK.

The focus is on "Air China," "Shanghai Airport," and "Daqin Railway."

Maintain the “Big Market” rating for the transportation industry in 2013.