Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>Revenue growth in Q3 (+15.5% Y/Y) held up reasonably well for Trip.com</li>
<li>But core margins continue to deteriorate: Adjusted EBITDA margin down -120 bps Y/Y</li>
<li>We still feel TCOM shares are pricey, and that earnings growth is unimpressive</li>
</ul>


Revenue growth in Q3 (+15.5% Y/Y) held up reasonably well for Trip.com
But core margins continue to deteriorate: Adjusted EBITDA margin down -120 bps Y/Y
We still feel TCOM shares are pricey, and that earnings growth is unimpressive


Trip.com Q325 Results | Revenue Growth OK | Core Margins Still Falling | Avoid

<ul>
<li>Growth rates of outbound and domestic air travel slowed again in September</li>
<li>Initial read on Golden Week demand: weak activity growth, weaker spending</li>
<li>In our view, it's increasingly difficult to retain an upbeat view of the sector</li>
</ul>


Growth rates of outbound and domestic air travel slowed again in September
Initial read on Golden Week demand: weak activity growth, weaker spending
In our view, it's increasingly difficult to retain an upbeat view of the sector


Monthly Chinese Tourism Tracker | Pace of Growth Slowed, Again | Golden Week? | October 2025

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>The top ten highest-yielding stocks under our coverage have an average yield of 7.4% for FY25F and 7.2% for FY26F, attractive amid the declining interest rate environment.</li>
<li>
<a href="https://www.smartkarma.com/entities/sinotrans-limited-h" target="_blank" data-smartkarma-citation="entities:1321:1" rel="noopener">Sinotrans (598 HK)</a>, <a href="https://www.smartkarma.com/entities/anhui-expressway-co-ltd-h" target="_blank" data-smartkarma-citation="entities:5236:1" rel="noopener">Anhui Expressway Co Ltd H (995 HK)</a>, and <a href="https://www.smartkarma.com/entities/china-railway-signal-communication-co-ltd" target="_blank" data-smartkarma-citation="entities:613:1" rel="noopener">China Railway Signal &amp; Communication (3969 HK)</a> are better quality ones with 6-7% average yield.</li>
<li>Chinese airlines are low on yields given they are still loss-making, but they have a good earnings rebound in 2H25, making them suitable for aggressive investors.</li>
</ul>


The top ten highest-yielding stocks under our coverage have an average yield of 7.4% for FY25F and 7.2% for FY26F, attractive amid the declining interest rate environment.

Sinotrans (598 HK), Anhui Expressway Co Ltd H (995 HK), and China Railway Signal &amp; Communication (3969 HK) are better quality ones with 6-7% average yield.
Chinese airlines are low on yields given they are still loss-making, but they have a good earnings rebound in 2H25, making them suitable for aggressive investors.


China & HK Strategy: The High-Yield Playbook

<ul>
<li>Despite a few pockets of improved demand, key Transpacific trade remains weak</li>
<li>Most carriers reported low (48% - 68%) but stable cargo load factors in August</li>
<li>For carriers, still lots of empty space to sell; macro view shows no "snap-back"</li>
</ul>


Despite a few pockets of improved demand, key Transpacific trade remains weak
Most carriers reported low (48% - 68%) but stable cargo load factors in August
For carriers, still lots of empty space to sell; macro view shows no "snap-back"


Monthly Air Cargo Tracker | August Shows Pockets of Growth | But LF, Pricing Both Still Very Weak

<ul>
<li>Led by Accommodation activity, Q225 net revenue growth was a solid +16% Y/Y </li>
<li>Some progress on OpEx control, but core margins declined <em>again</em> in Q225</li>
<li>Even with big buyback, is it worth US$75/ADS? We think fair value near US$60</li>
</ul>


Led by Accommodation activity, Q225 net revenue growth was a solid +16% Y/Y 
Some progress on OpEx control, but core margins declined again in Q225
Even with big buyback, is it worth US$75/ADS? We think fair value near US$60


Trip.com Q225 Results | Big Buyback a Surprise | But Margins Still Under Pressure | Fair Value US$60

China

Beijing Capital International Airport Company Limited operates both aeronautical and non-aeronautical business in the Beijing airport.  The Company provides aircraft movement and passenger service facilities, safety and security services, fire-fighting services, and ground handling services.  In addition, Beijing Capital operates duty free and other retail shops and leases properties.

Beijing Capital International Airport (BCIA) (694 HK)

Beijing Capital International Airport (BCIA)

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Beijing Capital International Airport (BCIA) (694 HK)

Trip.com Q325 Results | Revenue Growth OK | Core Margins Still Falling | Avoid

Trip.com reported Q3 results on Monday after the US close. Revenue growth was fine, but core margins continue to fall. We view the shares as...

Tracking Traffic

Monthly Chinese Tourism Tracker | Pace of Growth Slowed, Again | Golden Week? | October 2025

Chinese travel activity in September slowed, and a first look at Golden Week activity also suggests weak growth in travel and spending. We see few...

Tracking Traffic

China & HK Strategy: The High-Yield Playbook

With the increase in volatility in the near term due to the uncertainties from potentially higher tariffs and the Trump-Xi meeting in APEC, there...

Osbert Tang, CFA

Monthly Air Cargo Tracker | August Shows Pockets of Growth | But LF, Pricing Both Still Very Weak

August air cargo data from a range of carriers and cargo gateways around the Pacific Rim show uneven demand, but still-low utilization and weak...

Tracking Traffic

Trip.com Q225 Results | Big Buyback a Surprise | But Margins Still Under Pressure | Fair Value US$60

Trip.com announced a big share buyback last week, but its Q225 core results were unimpressive. Given modest growth expectations, we put fair value...

Tracking Traffic

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