上海机场(600009)

In 2017, both pax/flight growth normalized to 6.1%/3.5% YoY,from 9.9%/7.1% in 2016, due to SIAC's low punctuality, wethink.

SIAC's passenger traffic growth normalized to 8.8% YoY in Dec-17, vs. 9.4% inNov-17. Specifically, international traffic grew 10.9% YoY (11.6% in Nov-17), fasterthan domestic growth at 7.7% YoY (7.7% in Nov-17). In 2017, overall pax growthwas 6.1% YoY, moderating from 9.9% in 2016 (8.4% YoY in 4Q17 vs. 9.6% in 4Q16).

Aircraft movement growth also moderated to 3.9% YoY in Dec-17, from 4.8% inNov-17, with higher average pax per aircraft of 138 vs. 137 in Nov-17. Softness wasfound on all routes: domestic (+1.9% vs. +2.2%), international (+7.0% vs. +8.4%)and regional (+0.7% vs. +3.9%) routes. In 2017, aircraft traffic grew 3.5% YoY,below 7.1% in 2016 (4.2% YoY in 4Q17 vs. 5.9% in 4Q16).

Cargo/mail volume growth normalized to 3.2% YoY in Dec-17, following 6.7% inNov-17 as growth on all domestic (-7.9% vs. -7.1%), international (+5.8% vs. +9.7%)and regional (-2.0% vs. +1.8%) routes weakened. In 2017, total volume hasincreased 11.2% YoY, accelerating from 5.1% in 2016 (5.7% YoY in 4Q17 vs. 11.8% in4Q16).

CAAC penalty update: According to a CAAC announcement on Jan 3, 2018,approval of temporary flights, chartered flights and new route applications bySIAC will continue to be delayed until April 30, 2018, due to low punctuality.However, SIAC is allowed to reallocate its existing flight capacity tointernational/regional routes from domestic ones.