China Merchants Securities has released a research report indicating that across the first half of 2026, performance diverged among various sectors. Key infrastructure targets largely met expectations, while geopolitical tensions and supply chain disruptions boosted prosperity across shipping sub-sectors. Anti-involution measures continued to support freight rate recoveries in the express delivery industry, and air logistics saw simultaneous volume and price growth, although high jet fuel prices led to divergent profitability among air cargo carriers. Passenger traffic growth in the aviation sector slowed, and soaring fuel costs resulted in significant industry-wide losses in the second quarter.

Infrastructure

The infrastructure sector showed overall stability in the first half, with expectations for full-year performance to maintain prior trends. The highway passenger and freight industry center remained steady, with leading companies broadly meeting projections. Port container throughput continued to grow at a relatively fast pace, coal and iron ore volumes recovered steadily, while crude oil throughput remained relatively weak. Railway passenger traffic kept growing, and coal transportation volumes on the Daqin line improved notably. Looking ahead to the second half, highway performance is expected to remain stable, container ports are likely to continue outperforming bulk cargo, railway passenger volume is set to maintain growth, and coal transportation is anticipated to extend its recovery. Leading highway operators show stable cash flows and dividend expectations, while port sector valuations remain at low levels, suggesting attractive allocation opportunities.

Shipping

During the first half, all shipping sub-sectors experienced improved conditions driven by the US-Iran conflict, disrupted shipping routes, and overseas restocking demand. For the second half, the outlook is as follows: 1) Container shipping: The ongoing US-Iran conflict, peak-season stocking demand, and supply chain disruptions are expected to push freight rates upward month-over-month on US, Southeast Asian, and Middle Eastern routes during August-September. In the medium term, port congestion and supply chain fragmentation support trunk route rates, while smaller vessel segments face more favorable supply-demand dynamics, potentially leading to stronger sustainability in feeder shipping. 2) Oil tankers: VLCC rates have rebounded to $160,000-$170,000 per day, and with global inventories low, restocking demand is expected to gradually release from September into next year. 3) Specialty vessels: Exports of new energy equipment and automobiles continue to grow rapidly, with car carrier rates expected to improve sequentially in the third quarter. 4) Dry bulk: Due to weather conditions and canal congestion, market conditions are expected to remain strong in the third quarter. If La Niña intensifies from Q4 into next year, potentially causing canal droughts, freight rates could rise further.

Express Delivery

Anti-involution measures have driven year-on-year price improvements, leading to substantial profit growth among the Tongda-system companies. For the second half: 1) Volume: As the low base effect emerges, full-year industry volume growth is expected to maintain mid-single-digit rates. 2) Price: With the continuation of anti-involution policies, industry prices are expected to remain broadly stable, though year-on-year increases may moderate in the second half due to a high comparison base. Peak-season price competition warrants monitoring. 3) Costs: Economies of scale and automation investments are expected to continue optimizing unit costs. 4) Overall: Full-year industry profitability is poised for significant growth, although the pace of profit gains may slow in the second half.

Air Logistics

Geopolitical disruptions have driven simultaneous volume and price increases in the sector, but oil price shocks have caused divergent profitability among the three major cargo platforms. For the 2026 outlook: Industry supply-demand dynamics remain tight overall. Despite policy impacts on cross-border e-commerce, freight rates remain elevated in the seasonally weak Q3, and with jet fuel price increases narrowing quarter-over-quarter, profitability is expected to sustain growth. Long-term contracts signed in Q4 are likely to see year-on-year increases in 2027 contract prices. Given the substantial jet fuel price surge in 2026 which erodes profits, easing fuel cost pressures in 2027 could support continued profit growth next year.

Logistics and Supply Chain

High-base one-off disposal gains weighed on reported performance, though core operations generally improved. For the second half: 1) Freight forwarding: Geopolitical disruptions are expected to keep international freight rates elevated, with locked-in pricing models enabling sustained year-on-year profit growth in agency businesses. 2) Contract logistics: With demand bottoming out, focus shifts to operational efficiency gains and cost optimizations contributing to profits. 3) Attention is directed toward SF Express's cost optimization in its express business and its ability to pass through fuel cost changes through dynamic adjustments of domestic service discounts.

Aviation and Airports

Aviation demand growth has slowed, and with jet fuel prices soaring in Q2, airlines voluntarily reduced domestic capacity, turning the industry's first collective post-pandemic profit in Q1 into substantial losses in Q2. Airport passenger growth has correspondingly slowed, with international routes remaining the primary source of incremental traffic. For the second half: 1) Aviation: Oil prices remain the core variable affecting industry profitability. If high fuel costs persist, the industry faces significant earnings pressure. However, if geopolitical tensions ease and oil prices decline, combined with supply reductions improving supply-demand dynamics, profitability could recover, with low-cost carriers showing greater resilience. 2) Airports: With airlines adopting a more cautious stance on capacity expansion, passenger traffic is expected to be relatively subdued in the second half. International routes will continue to be the main growth driver, warranting attention on the recovery potential of non-aeronautical revenues such as duty-free sales, as well as cost pressures from new capacity coming online.

Risks include significant RMB depreciation, sharp oil price increases, worsening price wars in express delivery, major maritime safety incidents, and severe natural disasters.