High-speed rail posing a serious threat to Chinese airlines' growth

Competition is heating up.

Here's more from Barclays:

Airlines outlook 2013: We believe the Chinese airlines face a long-term threat of increasing competition from high-speed rail (HSR) after rail spending resumed in 3Q12. We are cautious on chasing the recent rally as 2013 earnings growth is mostly attributable to a low 2012 base. China's Airlines 2013 Outlook. 24 Jan 2013 (link).

4Q12 results preview: 4Q earnings season begins on 1 Feb with HPHT's announcement. Overall, we expect the CRCC (1186 HK) and CRG (390 HK) to surprise to the upside with the Chinese rail spending up >100% y/y in Oct-Nov while raw materials declined an average of 3% y/y, with high chances of margin expansion. In the shipping space, we expect the combination of higher valuations and stretched balance sheets to increase focus on the potential need for additional equity.