GTHT has released a research report maintaining an "Overweight" rating on aviation and tanker shipping.
1) Aviation: Geopolitical oil prices do not change the long-term logic of the super cycle. With oil prices at highs, load factors at highs, ticket prices at lows, and share prices at lows, investors should pay attention to bottom-fishing opportunities in aviation. 2) Tanker shipping: Dark fleet channels opening up has driven recent freight rates to repeatedly hit record highs, while geopolitical conflicts strengthen the medium-to-long-term logic. The sector remains a top recommendation.
The industry expects geopolitical conflicts to likely persist, tanker operating efficiency losses to continue, and restocking demand over the next two years to be virtually certain, supporting expectations that the tanker shipping boom will be sustainable over the medium term, with the added option of an unexpected upside in compliant demand should Iran sanctions be lifted. Recently, one-year and three-year time charter rates have risen to $300,000 per day and $110,000 per day, reflecting optimistic mid-term expectations from the industry, which will help ensure tanker companies' dividend appeal and support valuation floors. GTHT highlights that another opportunity to position in tanker shipping has emerged.
The main views of GTHT (SEHK: 02611) are as follows:
Aviation: Airlines control capacity to defend pricing, exhibition-driven business travel demand supports continued year-on-year rise in all-in fares.
Airlines have continued their strategy of controlling capacity to defend pricing during the off-peak season, a marked improvement from their summer strategy. The broker estimates that air passenger traffic declined about 5% year-on-year in mid-to-late October, with international route traffic maintaining positive growth. Load factors edged down year-on-year as airlines lowered their load factor targets; estimated domestic all-in fares maintained significant year-on-year increases, with recent exhibitions supporting robust business travel demand. It is expected that airlines will continue to rationally reduce flight execution rates in the new season, enhancing fare pass-through of oil prices. Under high oil prices in 2026Q3, weak business travel demand and airlines adding capacity to trade price for volume led to industry-wide operating pressure. GTHT notes that geopolitical oil prices do not change the long-term logic for aviation. Currently at a combination of high oil prices, high load factors, low ticket prices, and low share prices, a decline in oil prices would initiate an upward shift in the profit center and the unfolding of the long-term logic. Investors should pay attention to bottom-fishing opportunities.
Tanker shipping: Iranian attacks combined with high freight rates suppress demand, but the industry expects the boom to be sustainable over the medium term.
In September, the opening of dark fleet channels saw Middle East crude oil exports largely recover. STS transfers significantly reduced tanker operating efficiency and siphoned tonnage, causing supply shortages in the Atlantic market and driving an epic surge in tanker freight rates. Since October, intensified Iranian attacks have affected dark fleet cargo volumes, while ultra-high freight rates in the US Gulf began to impact refinery procurement pace. Middle East Oman/US Gulf/West Africa route TCEs fell about 20% month-on-month to $660,000/$550,000/$440,000. The industry expects geopolitical conflicts to likely persist, tanker operating efficiency losses to continue, and restocking over the next two years to be virtually certain, supporting expectations that the tanker shipping boom will be sustainable over the medium term, with the added option of an unexpected upside in compliant demand should Iran sanctions be lifted. Recently, one-year and three-year time charter rates have risen to $300,000 per day and $110,000 per day, reflecting optimistic mid-term expectations from the industry, which will help ensure tanker companies' dividend appeal and support valuation floors. GTHT highlights that another opportunity to position in tanker shipping has emerged.
Shipbuilding: In October, the gap between VLCC secondhand and newbuild prices deepened, with the industry broadly expecting VLCC aging to offset newbuild pressure.
Last week, the Ministry of Industry and Information Technology released domestic shipbuilding data for the first three quarters. In the first three quarters of 2026, China's shipbuilding completion volume, new orders, and order backlog accounted for 63.6%, 81.8%, and 72.4% of global market share, respectively. China's shipbuilding industry continues to dominate the global market, with further global share gains expected. In mid-October, Hengli Heavy Industries signed orders for 12 tankers, including 6 VLCCs at an average price of nearly $140 million per vessel. It currently holds nearly 70 VLCC orders, ranking first globally. Currently, 15-year-old VLCC secondhand vessel prices exceed $160 million, deepening the inversion with newbuild prices and reflecting the industry's optimistic expectations for the continuation of the spot market boom. The sustained tanker shipping boom continues to drive up tanker asset prices and shipbuilding demand, while shipyard capacity expansion remains constrained by dock, engine, and staffing limitations. The sustainability of the shipbuilding market boom will be significantly better than the previous cycle. While the market worries about newbuild delivery pressure for VLCCs in the coming years, the industry broadly believes that accelerated VLCC aging and the difficulty of shadow fleet vessels returning to the compliant market will effectively offset newbuild delivery pressure, and tanker supply rigidity will persist.
Risk factors: Economic fluctuations, geopolitical oil prices, tariffs, exchange rates, safety incidents, etc.
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