Passenger transport demand recovered slightly month on month in December 2021. We observe the trend of passenger transport demand in the future by tracking the PMI index of non manufacturing industry, the zero growth rate of social security, the number of Chinese tourists in major countries and the import and export amount of duty-free goods. In January 2022, the PMI index of non manufacturing industry decreased by 1.6pct to 51.1% month on month, of which the PMI of service industry decreased to 50.3% in January, lower than 1.7pct in the previous month, which is the low point in recent five months; The new order index of the service industry was 46.8%, down 1.4pct month on month. In December 2021, social zero increased by 1.7% year-on-year. In terms of the average growth rate of two years, the growth rate of social zero in December was 3.1%, slightly lower than 4.4% in November, mainly due to the drag of real estate chain and optional consumer goods. In December 2021, although the import and export amount of national duty-free goods decreased by 16.2% year-on-year, it still increased by 17% month on month. In December 2022, the number of Chinese tourists from Hong Kong, Taiwan and Japan continued to remain at a low level of less than 10000. In December 2021, the number of mainland residents visiting Australia was 763000, up 2.9% month on month.
Manufacturing capacity continued to release, and freight demand continued to pick up month on month. We observe the change trend of freight volume in the future by tracking the manufacturing PMI index, import and export growth, industrial added value growth and fixed asset investment growth. In January 2022, the manufacturing PMI index was 50.1%, with a month on month decrease of 0.2pct, which is in line with the seasonal law. In the past five years (2017-2021), the PMI in January fell by an average of 0.22pct month on month. With the entry of the traditional production off-season in January, the expansion of the manufacturing industry has weakened. In December 2021, the added value of industries above designated size increased by 4.3% year-on-year (the previous value was 3.8%), 11.9% higher than the same period in 2019, and an average increase of 5.8% in two years (the previous value was 5.4%); The month on month growth was 0.42% (the previous value was 0.37%). Since October 2021, with the timely adjustment of energy and energy consumption policies, the supply constraints have been gradually relaxed, industrial production has gradually recovered, and the year-on-year growth rate of industrial added value above designated size has rebounded for three consecutive months. From January to December 2021, the cumulative growth rate of fixed asset investment was 4.9% (the previous value was 5.2%). The annual fixed asset investment in 2021 increased by 8% compared with that in 2019, with an average growth rate of 3.9% in two years. Before the epidemic, the growth rates of fixed asset investment in 2018 and 2019 were 5.9% and 5.4% respectively. The average growth rates in 2021 and two years were lower than the overall level before the epidemic. In December 2021, the import and export amount increased by 20.3% year-on-year, decreased by 5.5pct month on month compared with November, and increased by 36.4% over the same period in 2019; In the first quarter of 2022, it is expected that the export growth rate will begin to decline. On the one hand, the Chinese epidemic has disturbed production and port trade activities, and on the other hand, the savings of American consumers have continued to decline and the consumption tendency after the festival is not high.
The exchange rate of RMB against the US dollar was stable, and the price of crude oil rose sharply. Based on the cost structure of the transportation company, we track the 7-day repo interest rate, LPR over five years and US dollar exchange rate to observe the change trend of financial expenses; Track the oil price to observe the change trend of operating cost. On the whole, the 7-day repo rate fluctuated slightly, and the LPR over five years decreased by 0.05pct in January 22; The exchange rate of RMB against the US dollar has remained stable recently, at about 6.37 yuan / US dollar; The price of Brent crude oil rose sharply recently and remained above $90 / barrel.
Investment suggestion: the epidemic situation outside China has been repeated, and the recovery of air passenger transport demand has been negatively impacted. We believe that the growth logic and location advantages of first-line airport companies and airlines have not changed substantially due to the epidemic situation; With the continuous advancement of covid-19 vaccine / treatment technology, the demand for air passenger transport will gradually recover, and the revaluation of relevant companies is a deterministic event. We maintain the “overweight” rating of the industry, recommend Air China Limited(601111) , Spring Airlines Co.Ltd(601021) , Shanghai International Airport Co.Ltd(600009) , Guangzhou Baiyun International Airport Company Limited(600004) , and suggest paying attention to China Eastern Airlines Corporation Limited(600115) , China Southern Airlines Company Limited(600029) , Juneyao Airlines Co.Ltd(603885) , Shenzhen Airport Co.Ltd(000089) and China Express Airlines Co.Ltd(002928) .
Risk analysis: the duration of covid-19 epidemic exceeded market expectations; The sharp decline of macro economy leads to the decline of industry demand; Sino US trade frictions continue to ferment, and the RMB exchange rate fluctuates greatly; Crude oil prices rose sharply.
