Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Focusing on Asian logistics, transportation, and travel companies

Asian Equities Analyst, Logistics & Transport

Thematic (Sector/Industry)

China Real estate / Thematic (Sector/Industry)

Zhuzhou CRRC Times Electric Co., Ltd. (3898 HK)

It's probably not a surprise that growth rates for most modes of Chinese transportation have slowed in recent years. The now years-long slowdown in China's external trade is well documented and it affects virtually all modes of transportation linked to imports and exports of physical goods. Likewise, although domestic modes of transportation (including passenger transportation) are better supported by the current macro environment, most of these modes are by now quite mature, and unlikely to grow significantly faster than GDP in the medium-term. In trying to identify areas of sustainable double-digit growth within China's transportation sector, we examined a selection of 12 different modes of transportation. These modes include cargo and passenger transportation, both international and domestic , and the data cover growth rates during three periods: compound annual growth from 2008 through 2015; 2015 Y/Y growth; and year-to-date growth in 2016 (through June or July). The table in the following section summarizes the growth rates for all modes of transportation we analyzed. We also included Chinese GDP growth rates for the periods under study, so readers can see which modes have grown significantly faster (or slower) than the Chinese economy as a whole.The two clear outliers in our analysis are a) express parcels; and b) international air travel, both of which show high and accelerating rates of demand growth. Later in the note we present ways investors can attempt to access the strong growth exhibited by these two segments.

It's probably not a surprise that growth rates for most modes of Chinese transportation have slowed in recent years. The now years-long slowdown in China's external trade is well documented and it affects virtually all modes of transportation linked to imports and exports of physical goods. Likewise, although domestic modes of transportation (including passenger transportation) are better supported by the current macro environment, most of these modes are by now quite mature, and unlikely to grow significantly faster than GDP in the medium-term. In trying to identify areas of sustainable double-digit growth within China's transportation sector, we examined a selection of 12 different modes of transportation. These modes include cargo and passenger transportation, both international and domestic , and the data cover growth rates during three periods: compound annual growth from 2008 through 2015; 2015 Y/Y growth; and year-to-date growth in 2016 (through June or July). The table in the following section summarizes the growth rates for all modes of transportation we analyzed. We also included Chinese GDP growth rates for the periods under study, so readers can see which modes have grown significantly faster (or slower) than the Chinese economy as a whole.The two clear outliers in our analysis are a) express parcels; and b) international air travel, both of which show high and accelerating rates of demand growth. Later in the note we present ways investors can attempt to access the strong growth exhibited by these two segments.

Dalian Wanda Commercial Properties (1567411D HK)

Shanghai Electric Group Company (601727 CH)

China Railway Construction Corp (1186 HK)

China Communications Construction (1800 HK)

Xinjiang Goldwind Science & Technology (002202 CH)

XCMG Construction Machinery A (000425 CH)

China Railway Signal & Communication (3969 HK)

Cosco Shipping Energy Transportation Co. Ltd. (H) (1138 HK)

Cosco Shipping Energy Transportation Co. Ltd. (H)

Shanghai Tunnel Engineering Co, Ltd. (600820 CH)

Cssc Offshore & Marine Engg Group (317 HK)

Shanghai International Airport (600009 CH)

Poly Real Estate Group Co., Ltd (600048 CH)

Metallurgical Corporation Of China Ltd (601618 CH)

Shanghai Electric Group Company (2727 HK)

Xinjiang Goldwind Science & Technology (2208 HK)

Beijing Capital International Airport (BCIA) (694 HK)

Beijing Capital International Airport (BCIA)

Dongfang Electric Corporation (600875 CH)

China Avionics Systems Co., Ltd. (600372 CH)

China Merchants Property Develpmt (200024 CH)

China International Marine Cntnrs Gp (2039 HK)

Metallurgical Corporation of China Ltd (1618 HK)

Shanghai Lujiazui Finance & Trade Zone (600663 CH)

Suzhou Gold Mantis Construction Decoration (002081 CH)

Suzhou Gold Mantis Construction Decoration

Shanghai International Port Group (600018 CH)

AviChina Industry & Technology H (2357 HK)

Shanghai Construction Group Co, Ltd. (600170 CH)

Beijing Originwater Technology Co,Ltd. (300070 CH)

Shenzhen Inovance Technology Co., (300124 CH)

China National Chemical Engineering Company A (601117 CH)

China National Chemical Engineering Company A

Zhejiang China Commodities City Group Co (600415 CH)

China International Marine Containers A (000039 CH)

AECC Aero-Engine Control Co. Ltd. A (000738 CH)

Yingkou Port Liability Co., Ltd A (600317 CH)

Chinese Transportation: In A Sea Of Decline, Express & Int'l Air Travel Are Islands of Growth