CITIC Construction Investment Global Transportation and Global Energy 2027 Investment Strategy: Conflicts, Arbitrage and Structural Contradictions
The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that the conflict stemmed from structural conflicts. As the global economy enters a period of relative weakness, the underlying contradictions gradually intensified and became prominent, eventually manifesting as trade wars and geographical conflicts. Structural contradictions will persist for a long time and bring ongoing turmoil and impact to the global economy and trade. The conflict reshaped the arbitrage mechanism, and changes in the arbitrage mechanism ultimately changed the flow of trade elements. Conflicts make supply chain security, personnel safety, policies, resources, and technology arbitrable elements, and ultimately drive changes in the flow of trade factors.
CITIC Construction Investment's main views are as follows:
The root causes of various global conflicts stem from structural political and economic conflicts. Currently, the world is mainly facing four fundamental contradictions: economic growth and income distribution are out of sync; trade structures and political affordability are misaligned; financial cycles amplify physical differentiation; and global governance lags behind risk proliferation. As the global economy enters a period of relative weakness, the underlying contradictions gradually intensified and became prominent, eventually manifesting as trade wars and geographical conflicts. The bank believes that structural contradictions will persist for a long time and bring continuing turmoil and impact to the global economy and trade.
The conflict reshaped the arbitrage mechanism, and changes in the arbitrage mechanism ultimately changed the flow of trade elements. Conflicts make supply chain security, personnel safety, policies, resources and technology arbitrable elements; new arbitrage factors drive comprehensive restructuring of goods, capital flow, people flow, and information flow, and ultimately affect the corresponding industry pattern.
The bank is optimistic about export-oriented industries that are deeply involved in the process of changing the global trade model.
Transportation: China's exports are strong, and factors such as tariffs and export tax rebates support the performance center; the supply side is affected by detours, port blockages, etc., and effective supply is lower than nominal supply, combined with stable shareholder returns.
Oil transportation: The Hormuz Strait conflict has caused medium- to long-term freight rates to rise; there is still a supply gap in the crude oil pallet, and demand for subsequent replenishment is strong, and long supply side routes and STS dilute capacity.
Special transport: China's “new three” export boom continues, and exports of wind power and construction machinery remain prosperous.
Ports and highways: The overall dividend asset defense attributes are strong. Structural contradictions in port blockages have existed for a long time, and future rate flexibility is expected to increase; road toll periods have become a core factor, and the railway passenger transport sector is more resilient.
Express delivery: Structural opportunities for express delivery are to “reduce costs and improve quality” and “clear the pattern”. Delivery from leading companies with the ability to reduce costs at the end of the day is preferred.
Risk Alerts
1) Global macroeconomic recovery falls short of expectations
Under multiple factors such as escalating geopolitical conflicts, intensifying supply chain challenges, and rising inflationary pressure, uncertainty about global economic recovery still exists, and recovery is still difficult. If the global macroeconomic recovery seriously falls short of expectations, global logistics and transportation demand may drop sharply at that time.
2) The price war in the express delivery industry is intensifying
Under current express delivery price supervision policies in various regions, the price war in the express delivery industry has dissipated; however, the expansion of production capacity of express delivery companies has yet to be fully implemented. When demand in the express delivery industry falls short of expectations or is in the off-season and cannot meet the overall capacity utilization rate of the express delivery industry, there is a growing risk of price wars in the express delivery industry.
3) The increase in logistics resource factor costs exceeded expectations
During the price war for express delivery companies, delivery costs were significantly reduced, leading to a decline in the income of express delivery frontline employees. Currently, many parts of the country have introduced relevant policies to guarantee the income of couriers. Combined, labor costs continue to rise, and the increase in labor costs for express delivery companies is likely to exceed expectations.
4) High-speed rail construction speed falls short of expectations
In the process of rapid development of high-speed rail construction in recent years, there is a phenomenon of blindly constructing high-speed railways and subways in some regions. Situations such as “heavy high speed, light speed, heavy investment and light output” have occurred. As a result, railway companies are facing major operating problems, and debt pressure has doubled. If some high-speed railways are built and operating problems are major, it may cause the speed of high-speed rail construction to slow down and the national high-speed rail networking process to slow down. As a result, the persistence of the imbalance in the national high-speed rail network exceeds expectations, leading to a slowdown in the performance improvement of high-speed rail companies.
Competition risks of other modes of transportation: High-speed railways have the advantages of high punctuality, large passenger capacity, economy and comfort, and low impact of natural climate. In 2016-2019, the Beijing-Shanghai High Speed Rail continued to optimize its train operation plan. The passenger occupancy rate increased steadily and the quality of train operation continued to improve, forming a situation of differentiated competition with road passenger transport and air passenger transport. However, if the road network continues to expand and improve in the future, the punctuality rate and service level of air passenger transportation continue to improve, it may still affect passenger travel choices. If there is a situation that greatly affects passenger turnover, it will have a certain negative impact on the company's operations.