China Aviation Oil has reported a significant increase in jet fuel volumes during the second half of 2025, reaching 8.8 million metric tons, a 15.3% year-on-year growth. Margins expanded sharply, with gross profit surging by 140%, supported by China's recovery in passenger traffic, which rose by 5.5% to 770 million passengers. Shanghai Pudong International Airport continued to be a key operational hub, with a 44.6% higher profit in 2H25 and contributing over half of the company's profits.
For fiscal year 2026, the company has adjusted its profit forecast upward by 32%, aiming to capitalize on increased refuelling demands and better supply margins. The upcoming terminal expansion at Shanghai Pudong Airport's Terminal 3, projected to increase passenger capacity by approximately 62.5%, is expected to further drive demand for conventional jet fuel and sustainable aviation fuels. The company maintains a BUY rating with a target price of S$2.53, citing growth driven by higher passenger volumes and strategic investments in sustainable fuels.
Market Overview and Outlook
The positive performance aligns with China's broader economic recovery and rising air travel demand. The process of expanding airport infrastructure, especially at Shanghai Pudong, is viewed as a catalyst for future growth, as well as strategic positioning for increased SAF adoption. Despite current high valuations, analysts remain optimistic about mid-term prospects driven by passenger volume growth and operational efficiencies.
Overall, China Aviation Oil demonstrates robust financial health with a net cash position of US$686.9 million, positioning it well to sustain growth and strategic initiatives in the aviation fuel segment.
