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Expo-linked stocks set to benefit

Expo-related stocks are expected to recover as increasing numbers of visitors are heading to Shanghai to attend the event, which will boost the transport, hotel and retail sectors, analysts said.

"Stocks in Expo-related sectors slumped faster than the A-share market as the number of visitors was smaller than expected initially. But the approaching peak season in summer will help attract more tourists to the Shanghai World Expo and related stocks will be re-valued," said Liu Guohong, an analyst at Huatai United Securities Co.

Expo stocks dropped 25.12 percent on average from April 16 to May 31, when the CSI300 Index lost 16.81 percent.

As many as 550,000 tourists visited the Expo on June 15, a record high since the six-month event was opened to public on May 1. By contrast, the number of visitors on May 5 was the lowest at 88,900.

The transport sector is seen as the big winner from the event. It is estimated that 13.5 million passengers will fly into Shanghai to visit the Expo. China Eastern Airlines, the country's second-largest carrier with more than 50 percent market share in Shanghai, will get a boost from the robust demand. The Shanghai-listed carrier flew 5.17 million passengers in May, a jump of 45 percent from a year earlier. It also carried 65 percent more cargo at 124,000 tons in the same month from a year ago.

Huatai Securities estimated revenue of airports to grow 30 percent, 30 percent for railways, 37 percent for the Metro system and 28 percent for taxis during the Expo.

Hotel stocks, such as Shanghai Jinjiang International Hotels Development Co and China CYTS Tours Holding Co Ltd, are also expected to benefit from the high room occupancy and more expensive room rates.

Shanghai's retail sales rose 22 percent during the five-day May Day holiday - the highest growth since 2005 and 7.9 percentage points higher than the May Day holiday last year. Consumers spent 4.1 billion yuan (US$600 million) during the holiday.

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