Export data and port volumes in Sept-09 suggest external
demand is picking up. Latest PMI for new export orders
advanced by 1.2pt to 54.5 in Oct-09. Other anecdotal evidence
from the 106th China Import & Export Fair (The Canton Fair)
shows good recovery in both transaction volumes and the
numbers of foreign buyers, which bodes well for the export
outlook in the next six months, we believe.
 The focus on air traffic recovery is tilting towards international /
regional routes and cargo demand, while the domestic traffic
rebound should normalize after peaking in Jul/Aug-09.
 Further fuel price hikes in 3Q09 are tending to erode the
margins of shipping companies and offset the earnings
momentum of Chinese airlines led by strong demand recovery,
while earnings should continue to recover for airports and ports,
which are mostly volume-driven.
 Global new orders retreated from 6.4mn DWT in August to
1.6 mn DWT in September, supporting our view that the
recovery in July and August is not sustainable. We think the
industry will continue to suffer from ‘triple overcapacity’, with the
U-shape recovery yet to start.
 We are long-term positive on CIMC, as the company’s
diversified business portfolio should help it survive the downturn,
while the rising mismatch between fleet and box suggests earlier
recovery potential for container manufacturers.