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1. Summary of the 2019 annual report of the military industry and the first quarter report of the 2020 year: The growth trend was maintained in 2019, and the high prosperity was verified.
The annual revenue and profit increased both in 2019, and the profit growth rate reached 22.53%: As of April 30, the 84 listed military industry companies we are focusing on have disclosed their 2019 annual reports and the first quarter reports of the 2020 year. Judging from the 2019 performance of 84 key military industry companies, the overall revenue was 417.888 billion yuan, a year-on-year increase of 5.42%; the overall net profit attributable to shareholders was 18.309 billion yuan, a year-on-year increase of 22.53%; the overall gross profit margin was 18.09%, an increase of 0.75 percentage points year-on-year; the period expense ratio was 12.43%, an increase of 0.29 percentage points year-on-year; the net profit margin was 4.65%, an increase of 1.19 percentage points year-on-year.
The revenue growth of the aviation sector in the sub-industry is the most obvious, and profit growth remains stable: From the perspective of sub-industry, only the operating income of the aerospace sector in each sub-industry declined, a year-on-year decrease of 10.50%, mainly affected by the sharp decline in operating income of *ST Aviation. Among other sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub-industry sub- In terms of the growth rate of net profit attributable to shareholders, the aerospace sector grew at the fastest rate of 222.33%, mainly due to the sharp reduction in the loss rate of *ST Aviation Communication and the turn of Aerospace Morning Light into profits. The ship sector grew at 189.70%, mainly due to the significant loss of China Shipbuilding Defense of 2018 and the turn of loss into profits in 2019. The aviation sector grew at 18.45%, and the weapons and equipment sector fell at 7.44%, mainly due to the decline in profits of China Shipbuilding Red Arrow, and the cross-industry supporting sectors fell by 18.53%, mainly due to the significant losses of Xinyan Co., Ltd. and Dongtu Technology. In terms of gross profit margin, the aerospace sector and cross-industry supporting sectors have improved significantly, with an increase of 3.48 percentage points and 2.61 percentage points respectively. The gross profit margins of other sectors have fluctuated slightly up and down. In terms of cost rate, the aerospace sector increased by 3.31%, with the largest increase. In terms of net profit ratio, the aerospace and ship sectors both increased by more than 3 percentage points, and the cross-industry supporting areas fell by 1.89 percentage points. Overall, the revenue and profit growth of the aviation sector in each sector is relatively stable, and the profitability of also increased slightly.
The income of private enterprises has grown rapidly, and the gross profit margin and expense ratio are higher than that of state-owned enterprises: From the perspective of enterprise attributes, private enterprises' income increased by 10.48%, an increase of greater than that of state-owned enterprises. In terms of net profit attributable to shareholders, state-owned enterprises grew by 41.68%, while private enterprises fell by 34.11%, mainly due to the large losses of companies such as Xinyan Co., Ltd. and Dongtu Technology. The gross profit margin of private enterprises increased by 1.81 percentage points to 37.45%, still significantly higher than the 16.28% of state-owned enterprises. The cost rate of private enterprises is 21.99%, and the cost rate of state-owned enterprises is 11.53%. In terms of net profit ratio, private enterprises fell by 4.77 percentage points to 7.17%, while state-owned enterprises rose by 1.71 percentage points to 4.42%.
Upstream materials and electronics growth significantly demonstrates the high prosperity of the industry: From the perspective of industrial chain distribution, upstream materials revenue and net profit attributable to shareholders increased by 17.10% and 48.51% respectively, among which the profit growth came from three companies: AVIC Hi-Tech, Guangwei Composite and Baoti Co., Ltd. The revenue and net profit attributable to shareholders of upstream electronics companies increased by 6.70% and 30.99% respectively. The profit growth rate was significantly higher than the revenue growth rate, which was mainly due to the impact of Quanxin Co., Ltd.'s turnover of losses into profits. Upstream parts revenue and profits both declined, mainly due to the impact of Xinyan Co., Ltd. If the impact of Xinyan Co., Ltd. is excluded, the revenue and profit of the parts company will increase by 0.53% and 8.29% respectively. Revenue and profit of midstream system companies increased by 8.24% and 16.72% respectively, while gross profit margin, expense ratio and net profit margin increased by 0.98 percentage points, 0.69 percentage points and 0.28 percentage points respectively, with a relatively stable growth overall. The revenue and profit of downstream assembly companies increased by 3.56% and 116.62% respectively. The high profit growth rate was mainly affected by the large loss in China Shipbuilding Defense in 2018 and the reduction in the loss range of *ST Hangtong in 2019. If the impact of China Shipbuilding Defense and *ST Hangtong were excluded, the revenue and profit of downstream assembly companies increased by 5.76% and -3.81% respectively.Overall, after excluding the influence of individual outliers, upstream materials and upstream electronics performed the best in terms of revenue and profit growth, followed by midstream system companies and upstream parts companies. The profits of assembly companies have declined to a certain extent, and assembly companies with decreased profits are concentrated in the fields of ships, satellites, ground armors and other fields. We believe that most of the upstream materials and electronic companies are covered by the entire military industry, which can reflect the overall industry development trend to a certain extent, and their growth clearly demonstrates the high prosperity of the industry.
The epidemic in the first quarter has a certain impact on the military industry sector: Judging from the first quarter report of 2020, the overall revenue of the sector in the first quarter was 71.171 billion yuan, a year-on-year decrease of 4.38%, but the net profit attributable to shareholders increased significantly by 84.72%, mainly due to the impact of China Shipbuilding Defense's turnover of losses into profits. After excluding the impact of China Shipbuilding Defense, the overall revenue and net profit attributable to shareholders in the first quarter were -4.20% and -21.92% respectively. Overall, the epidemic has a certain impact on the military industry sector, but we believe that it is mainly the impact of the resumption of work and the supply side such as raw material supply. The demand side is expected to have a small impact. As the domestic epidemic control is expected to gradually recover, it is expected to continue to maintain the growth trend throughout the year.
2. Review of military industry market from the beginning of the year to the present: The overall sector has the largest increase, the aerospace sector has the largest increase
2020 As of April 30, CITIC Military Industry sector rose 5.98%, ranking 6th among all 30 sectors. During the same period, the Shanghai Composite Index, Shenzhen Component Index, SME Index, ChiNext Index, CSI 300 and CSI 500 Index rose -7.30%, 0.78%, 4.08%, 12.91%, -5.77% and -0.23% respectively. The military industry sector is relatively relative to the Shanghai Composite Index, Shenzhen Component Index, SME Index, CSI 300 and CSI 500 The indexes all have relatively excess returns and only underperformed the ChiNext Index. In detail, the most important market trend from the beginning of the year to the present is February 4 to March 5, when the overall market rebounded after the Spring Festival. In one month, the military industry sector rose by more than 20%, which was significantly higher than the excess returns of indexes such as the Shanghai Composite Index and the Shanghai and Shenzhen 300. We judge that on the one hand, it is driven by the overall market rebound, and on the other hand, there are also catalytic effects of incidents such as the US embargo on aircraft engines, SpaceX launch of low-orbit satellites and state-owned enterprise reforms.
From the perspective of the rise and fall of the military-industry sub-sector, the aerospace, aviation, ground garage and ship manufacturing sub-sectors rose by 12.97%, 3.53%, 4.51% and -18.50% respectively. Among them, the aerospace sector had the largest increase. We believe that it is mainly due to the impact of the continuous advancement of SpaceX's "Starlink" plan, and the increase of satellite Internet-related companies has been largely affected.
3. Industry view: It is less affected by the epidemic, and its comparative advantages and configuration value highlights
(I) Fundamental angle: Demand is expected to maintain stable growth in the year of the 13th Five-Year Plan. The impact of the epidemic on the military sector is limited in the whole year.
. Demand is expected to maintain stable growth in the year of the 13th Five-Year Plan.
The national defense budget maintains stable growth and is expected to maintain a higher growth than GDP in the future. my country's defense budget maintained double-digit growth for five consecutive years before 2015. With the decline in GDP growth, the growth rates of the defense budget from 2016 to 2018 were 7.6%, 7.0% and 8.1%, respectively. The growth rate shifted but remained stable. The budget in 2019 increased by 7.5%, with the total number reaching 1190 billion yuan. On July 24, 2019, the Ministry of National Defense released the white paper "China's National Defense in the New Era", which for the first time compared the countries that ranked among the top in the world's defense expenses for the first time, and pointed out that China's defense expenses are at a low level, both in terms of GDP and national fiscal expenditure, as well as the per capita and per soldier amounts of nationals. In 2017, China's defense expenses accounted for sixth among the countries that ranked among the top in the world in terms of defense expenses, and the lowest among the permanent members of the UN Security Council. In 2018, the U.S. and Russia accounted for 3.16% and 3.93% of GDP, respectively, while China accounted for only 1.87% of GDP. Therefore, we expect that the growth rate of military expenditure will remain higher than GDP in the long term, and there is a lot of room for growth in the future.
The proportion of equipment expenses in the national defense budget increased, and the compound growth rate of equipment investment reached 13.44% from 2010 to 2017. "China's National Defense in the New Era" white paper disclosed the composition of my country's national defense expenses in recent years. China's national defense expenses are divided by purpose, mainly composed of personnel living expenses, training and maintenance expenses and equipment expenses. Among them, equipment expenses are in the research, testing, procurement, maintenance, transportation, storage of weapons and equipment. The proportion of my country's equipment expenses in the national defense budget has increased from 32.2% in 2010 to 41.1% in 2017, and the compound growth rate of equipment investment has reached 13.44%, indicating that with the advancement of military reform, the non-combat troops in the agency have gradually been streamlined, and the focus of national defense expenditure is developing towards increasing the construction of weapons and equipment. But at the same time, compared with the US military expenditure structure, my country's military equipment construction is still in the "make up" stage, and the level of equipment modernization still needs to be improved, and the growth of sub-industry such as the Air Force, Navy, and Information Equipment may be faster.
National defense and military construction are approaching key nodes, and the pace of equipment delivery is expected to accelerate. The report of the 19th National Congress of the Communist Party of my country clearly defines the three development stages and overall goals of national defense and military construction in the new era. The first stage is to ensure that mechanization is basically achieved in 2020, significant progress has been made in informatization construction, and significant improvement in strategic capabilities. In addition, the military's "13th Five-Year Plan" construction has entered its final year and is approaching a key node. We believe that the delivery pace is expected to accelerate. In recent years, new equipment in my country has been continuously emerging. New helicopters, fighter jets, transport aircraft and other equipment have been officially unveiled at military parades and air shows, and the installation speed is expected to accelerate.
. The impact of the epidemic has limited impact on the military industry sector throughout the year, and it is expected to maintain a growth trend. We believe that the epidemic has limited impact on the military industry. From the perspective of supply and demand, there is almost no impact on the demand side. Major projects still require delivery as planned, orders remain full, and the growth trend is obvious. In addition, the military industry sector is mainly domestic demand, and the proportion of overseas business is not high. There are only 16 companies with overseas revenue accounting for more than 10%. Most military enterprises do not have overseas business revenue; on the supply side, the resumption of work will be postponed approximately 2-4 weeks, which has a certain impact on the first quarter. However, the overall delivery proportion of the military industry in the first quarter is not high, and subsequent measures such as overtime are expected to gradually resume growth. Therefore, we expect the overall performance of the military industry sector to begin to improve quarter by quarter in the second quarter. It is expected to maintain a growth trend throughout the year, with high certainty and comparative advantages gradually emerging.
(II) Valuation angle: The valuation level is in the historical bottom range
As of April 30, 2020, the overall PE valuation level of the military industry sector was 61.21 times, lower than the average level from 2015 to the present 102.02 times; the PE valuation level of the Aerospace Division was 68.76 times, lower than the average level from 2015 to the present 118.74 times; the PE valuation level of the weapon and weapon sub-sector was 57.37 times, lower than the average level from 2015 to the present 178.48 times.
As of April 30, 2020, the PS valuation levels of military main engine leaders such as AVIC Aircraft, AVIC Shenyang Aircraft, China Direct Co., Ltd., AVIC Power and Inner Mongolia First Aircraft were 1.42 times, 1.97 times, 1.65 times, 2.21 times and 1.28 times respectively; the PE valuation levels of military blue-chip stocks such as AVIC Optoelectronics, AVIC Electrical, AVIC Mechanical and Electrical and AVIC Electronics were 36.83 times, 28.53 times, 29.48 times, 31.06 times and 38.69 times respectively. All are in the bottom range of historical valuations.
(III) Position angle: The holding ratio of the military industry sector has further declined, and the over-allocation ratio hit a new low in 2015
Recently, public funds have announced the heavy holdings of shares in the first quarter of 2020. We have analyzed the heavy holdings of public funds based on the 84 military industry targets we are focusing on. (Note: The data in this article are based on the data of the top ten heavily held stocks released by all public funds every quarter as the statistical scope.)
Judging from the heavy holdings of public funds in the first quarter of 2020, the allocation ratio of 84 military targets we focus on is 1.35%, a decrease of 0.26 percentage points from the end of the fourth quarter of 2019; the overall low allocation was 0.56 percentage points, a decrease of 0.43 percentage points compared with the end of the fourth quarter of 2019, and the over-allocation ratio hit a new low since 2015.
From the proportion of holdings of different types of funds, in the first quarter of 2020, the proportion of holdings of military-level funds was 36%, an increase of 1 percentage point month-on-month; military-industrial ETFs accounted for 5%, a decrease of 2 percentage points month-on-month; military-industrial theme funds accounted for 16%, a decrease of 4 percentage points month-on-month; other types of funds accounted for 43%, an increase of 5 percentage points month-on-month.
cross-industry supporting facilities, aviation and aerospace holdings accounted for a large proportion: sub-industry, the weapons and equipment sector held 4.20%, the allocation ratio was 0.03%, the low allocation was 0.05 percentage points, the allocation ratio was the same as in the fourth quarter of 2019; the ship sector held 5.33%, the allocation ratio was 0.04%, the low allocation ratio was 0.4 percentage points, the allocation ratio decreased by 0.05 percentage points month-on-month; the aviation sector held 34.23%, the allocation ratio was 0.24%, the low allocation ratio was 0.3 percentage points, the allocation ratio decreased by 0.14 percentage points month-on-month; the aerospace sector held 34.23%, the allocation ratio was 0.24%, the low allocation ratio was 0.3 percentage points, the allocation ratio decreased by 0.14 percentage points month-on-month; the aerospace sector held 34.23%, the allocation ratio was 0.24%, the low allocation ratio was 0.3 percentage points, the allocation ratio decreased by 0.14 percentage points month-on-month; the aerospace sector held 34.23%, the allocation ratio was 0.24%, the low allocation ratio was 0.3 percentage points, the allocation ratio decreased by 0.14 percentage points month-on-month; the aerospace sector held 34.23%, the allocation ratio was 0.24%, the low allocation ratio was 0.3 percentage points, the allocation ratio decreased by 0.14 percentage points month-on-month; the aerospace sector held 34.13 percentage points 19.25%, the allocation ratio is 0.13%, the low allocation is 0.13 percentage points, the allocation ratio increases by 0.09 percentage points month-on-month; the cross-industry supporting positions account for 37%, the allocation ratio is 0.26%, the low allocation is 0.35 percentage points, the allocation ratio decreases by 0.03 percentage points month-on-month.
From the perspective of enterprise attributes, state-owned enterprises account for 85.80%, the allocation ratio is 0.59%, the low allocation is 0.89 percentage points, and the allocation ratio decreases by 0.15 percentage points month-on-month; private enterprises account for 14.2%, the allocation ratio is 0.10%, the low allocation is 0.33 percentage points, and the allocation ratio increases by 0.02 percentage points month-on-month.
From the perspective of the industrial chain link, upstream holdings account for 32.22%, and the allocation ratio is 0.22%, and the allocation ratio is 0.19 percentage points, and the allocation ratio is the same as last quarter; midstream holdings account for 31.73%, the allocation ratio is 0.22%, and the allocation ratio is 0.57 percentage points, and the allocation ratio increases by 0.02 percentage points month-on-month; downstream holdings account for 36.04%, the allocation ratio is 0.25%, and the allocation ratio is 0.46 percentage points month-on-month.
shareholding concentration remains high: the top ten heavily held stocks with the highest allocation ratio in the first quarter accounted for 75% of the fund's heavy holdings, an increase of 1 percentage point compared with the fourth quarter of 2019, and the shareholding concentration is still at a high level.
Top ten heavily held stocks added Guangwei Composite , Aerospace Development and China Satellite : The top ten stocks holding positions of public funds in the first quarter of 2020 are Haige Communications, AVIC Optoelectronics , Guangwei Composite , Aerospace Development, AVIC Mechanical and Electrical , Aerospace Power, AVIC Aircraft, China Satellite, Aerospace Electronics, and China Heavy Industry. Compared with the fourth quarter of 2019, 7 stocks of Haige Communications, AVIC Optoelectronics, AVIC Mechanical and Electrical , AVIC Power, AVIC Aircraft, Aerospace Electronics and China Heavy Industry were relatively stable, with 3 new stocks of Guangwei Composite , Aerospace Development, and China Satellite, reducing China Direct Shares, AVIC Shenfei and Inner Mongolia One. The first heavily held stock, Haige Communications, has 30 funds with heavy holdings, a decrease of 3 on the previous month, and 13 funds with heavy holdings in AVIC Optoelectronics . 41 funds with heavy holdings in aerospace development have increased, 18 funds with heavy holdings in AVIC have increased, and 15 funds with heavy holdings in China Satellite have increased.
Judging from the increase or decrease in the number of individual stocks, the top five stocks with an increase in the number of institutional stocks are Aerospace Development, AVIC Mechanical and Electrical , China Satellite, Guangwei Composite , and Xinyan Co., Ltd., with the number of shares increasing by 105.757834 million, 54.287974 million, 25.983921 million, 21.680548 million, and 14.525883 million, with the increase of 848.25%, 34.76%, 209.93%, 206.98%, and 100.00%; the top five stocks with a decrease in the number of institutional stocks are China Heavy Industry, AVIC Shenfei, AVIC Electronics, Zhongzhi Shares, and AVIC Aircraft, respectively, with the number of shares decreasing by 11100.662 There were 10,000 shares, 41,663,381,000 shares, 33,662,612,000 shares, 33,152,295 shares, and 25,827,300 shares, with a decrease of 36.35%, 66.65%, 72.08%, 76.96%, and 21.75%.
(IV) Catalytic angle: The deepening of external tensions and the deepening of domestic reforms may catalyze the military industry market
We believe that the catalysis of the military industry this year may come from two aspects, one is the deepening of domestic reforms.
, international tensions and industry emergencies catalyzed
Since 2020, the US-Iran conflict, aircraft engine embargo, and the "Starlink" plan satellite launch have all driven up sectors or related stocks. On January 3, after the U.S.-Iran conflict, the CITIC Military Industry Index rose 5.86% in five trading days, and the Shanghai and Shenzhen 300 Index fell 0.96%, and the excess returns reached 6.82%. On February 16, media reported that the US government was considering canceling the license to export aircraft engines to China, and listed companies related to aircraft engines such as Aviation Engine, Aviation Technology, and Aviation Engine Control all showed significant increases; after February, the rapid advancement of the "Starlink" plan also led to a rise in domestic satellite Internet-related companies.
. The impact of the epidemic, the domestic and foreign situation has forced the deepening of reforms to
From December 19, 2019, the Central Economic Work Conference clearly stated that it would designate the three-year action plan for the reform of state-owned enterprises. From December 19, 2019, the State-owned Assets Supervision and Administration Commission held a meeting of the heads of central enterprises from 24 to 25, 2019, to study and deploy key tasks for 2020, and then to the 2019 press conference on the economic operation of central enterprises on January 15, 2020, the 2019 press conference on the economic operation of central enterprises, saying that the strategic restructuring of central enterprises will be further promoted in 2020. It can be seen that the reform of state-owned enterprises is expected to accelerate in 2020. As of April 20, the three-year action plan for the reform of state-owned enterprises has been initially formed and will be issued at a faster pace. , combined with the impact and impact of the epidemic, has undergone major changes in the domestic and foreign situation. We believe that it will force the domestic to release its development potential by accelerating the deepening of reforms.
As a key area of reform, we believe that we will also make a difference, including asset securitization, pricing mechanism reform, incentive mechanism reform, etc., which may continue to advance, and the speed is expected to continue to accelerate. At that time, a certain catalysis will be formed for the sector's market, and the development potential of military listed companies is also expected to continue to be released.
4. Investment strategy: two aspects to explore investment opportunities
We believe that investment opportunities should be explored from two aspects. On the one hand, investment targets in sub-industry with little impact from the epidemic, high growth certainty, prominent comparative advantages, stable industry competition pattern, and reasonable valuation. On the other hand, investment targets in sub-industry with positive medium- and long-term development trends and significant strategic significance.
(I) Subdivided industries that are less affected by the epidemic, have high growth certainty, have prominent comparative advantages, and have stable industry competitive landscape
Under the current external environment, it is recommended to focus on subdivided industries that are less affected by the epidemic, benefit from the industry demand prosperity that is expected to maintain, have good growth trends, have relatively prominent comparative advantages, and have stable industry competitive landscape, including the electronic components field upstream of the military industry chain, new materials field, core system field in the midstream of the industrial chain, and the assembly field in the downstream of the industrial chain.
Components companies upstream of the industrial chain: Aerospace Electrical Appliances, AVIC Optoelectronics , Hongda Electronics, Torch Electronics, Zhenhua Technology, Hongyuan Electronics;
New materials companies upstream of the industrial chain: Guangwei Composites , Zhongjian Technology, AVIC Hi-Tech, Philips;
Core system companies in the industrial chain: AVIC Electrical Appliances, AVIC Electrical Appliances,
Core system companies in the industrial chain: AVIC Engine Power, AVIC Shenfei, Zhongzhi Shares, AVIC Aircraft, Inner Mongolia One Aircraft.
(II) The medium- and long-term development trend of the industry is improving and has great strategic significance
. Aero engine industry: The embargo storm highlights the strategic significance of aviation engines, and industrial investment is expected to increase
. Although the embargo storm has subsided, the importance of aviation engines is expected to increase. In February 2020, some US media reported that the US government was considering canceling the license to export LEAP-1C engines to China by CFM (a subsidiary of GE). On April 7, the US government issued a license to GE, allowing the supply of engines to COMAC C919 passenger aircraft.Although the embargo storm will eventually subside, my country can still continue to obtain civil aviation engines supplied by the United States, this incident will undoubtedly make my country pay more attention to independent research and development in the field of aviation engines, firmly follow the route of independent development, and support and investment in related fields are expected to be further increased.
Current status of the aviation engine industry: Overall, the aviation engine industry is still a clear shortcoming of my country's aviation industry.
Military aviation engine industry: Overall lags behind the development of aircraft, and some still rely on imports: Due to historical reasons, my country's military aviation engines were mainly based on surveying, mapping and imitation, and did not pay enough attention to basic research, forward design, etc., and lacked technical accumulation, resulting in the long-term inability to master the core technology of aircraft. Therefore, overall lags behind the development of aircraft and cannot meet the needs of domestic aviation equipment. Some still rely on imports from Russia and Ukraine (it is reported that in the past 10 years, my country has imported about 400 AL-31F engines from Russia in batches).
Civil aviation engine industry: Started late, there are currently no mature products: my country's civil aviation engine industry has only developed for more than ten years since the establishment of China Aviation Developer in 2009. It started late, and its foundation is very weak. There are no mature products yet. It has been able to be a secondary supplier for a long time, and it is at the end of the industrial chain, with low technical level and profitability. The domestic civil aircraft ARJ21, which has been delivered and used, and the C919, which is currently being awarded airworthiness evidence, are both used by foreign aircraft engines.
The development trend of the aero engine industry has gradually improved:
The three factors that restricted the development of the aero engine industry in the past include: (1) The degree of attention to independent research and development is insufficient. For a long time in history, my country's aerospace engines mainly focus on surveying, mapping and imitation, and do not pay enough attention to basic research, positive design, etc., and lack of technical accumulation, resulting in the long-term inability to master the core technology of aero engine; (2) The system and mechanism constraints of dependence on aircraft: Before 2016, my country's aerospace engine industry was once affiliated with AVIC Industries Group, and the development of corresponding aero engines was dependent on the development of aircraft. On the one hand, the development cycle of aerospace engine is longer than that of an aircraft development cycle, so under this system, aviation The development of engines has always lagged behind the development of aircraft; on the other hand, if problems arise in the development of aircraft, the corresponding aero engines will also be affected, which will affect the accumulation of technology; (3) Insufficient capital investment: a large amount of capital investment is a necessary condition for the development of the aviation engine industry, and my country's capital investment in this field is lacking.
At present, the above three factors have improved, and the development trend is improving: (1) More emphasis has been placed on independent research and development: At present, a consensus on independent research and development has been formed within the aerospace engine industry, and the importance of basic research, positive design, material technology, experimental verification, etc. has been continuously improved. It can be said that the development of aerospace engine has been on the right track; (2) The system and mechanism that depend on aircraft have been solved: In 2016, with the establishment of China Aerospace Engineering Group, the official components of the national team of aviation engines were officially unveiled, and the status of aerospace engine has been significantly improved. The development system of aerospace engine has been solved accordingly. In addition, in the context of continuous integration of central enterprises, the establishment of the new aerospace engine central enterprises fully demonstrates the country's attention to the aerospace engine industry; (3) Major special funding problems: March 2017, The two aircraft special projects have been officially launched. With the gradual implementation of major aircraft engine projects worth hundreds of billions of yuan, it can be said that the financial problems that restrict the development of aircraft engines have been basically solved.
Future prospects, military aviation engines have entered a harvest period, and civil aviation engines have a long way to go
Military aviation engines: gradually get rid of import dependence and make up for shortcomings: With the gradual mass delivery of key aircraft engines such as Taihang, problems such as the reliability of my country's military aviation engines have been gradually solved. It is currently close to Russia's development level, and has basically reached a "useable" state, and has gradually gotten rid of the situation of dependence on import.As factors that restrict the development of the industry are constantly being solved, the models that have been delivered by military aviation engines are expected to steadily increase, and the technical level is constantly improving during use, entering a healthy development state of positive feedback cycle; more new models are also constantly accelerating the development process, and the genealogy is constantly improving and completing, and the pattern of production generation, development generation, pre-research generation, and exploration generation is taking shape. In the foreseeable future, aircraft engines that have been delivered in batches are expected to continue to increase their supply capacity and steadily increase the delivery quantity. More and more new models will begin to achieve batch delivery, and higher-end and advanced generation aircraft engines will also be constantly explored, thereby completely getting rid of the dependence on imports and filling the shortcomings of my country's aviation industry.
Civil aviation engine: Forward research and development, attach importance to technological accumulation and basic research, and advance steadily: With the establishment of China Aviation Developer in 2009, China's civil aviation engine industry began to set sail. Although it started late, its technical accumulation was weak, and the economic and safety requirements of civil aircraft and airworthiness systems were far from military aircraft. However, it should be seen that the development of civil aviation engines has also absorbed a lot of experience in military aircraft development. From the beginning, it has been focused on technological accumulation and basic research. With the strong support of the country, it is moving forward step by step.
Overall, we believe that with the establishment of China Aviation Engine, the gradual implementation of two-level special projects, the increasing maturity of military aviation engines, and the steady advancement of civil aviation engines, the overall development trend of the domestic aviation engine industry is improving. Considering the high technical content of aviation engines, large capital investment and important strategic significance, it is expected that state-owned enterprises will still dominate. Therefore, we recommend focusing on aviation engines' national team aviation engine power, aviation technology and aviation engine control; however, in the field of upstream raw materials and components, more and more private enterprises will also play an important role with their flexible systems and mechanisms and entrepreneurial spirit. Civilian-sponsored enterprises recommend focusing on Torch Electronics and Yingliu shares.
. Satellite Internet Industry: External "Star Link" forces, domestic new infrastructure is included, satellite Internet ushers in development opportunities
"Star Link" plan is rapidly advancing, "forced" the development of the domestic low-orbit satellite Internet industry. In 2015, SpaceX proposed the "Starlink" plan to launch 12,000 satellites worldwide, aiming to provide low-cost Internet connectivity services worldwide and work will begin in 2020. Since 2019, SpaceX has begun to use the Falcon 9 rocket to send seven batches of 420 satellites to space orbit. On April 24, 2020, after the seventh batch of 60 satellites were successfully launched, Elon Musk said that the "Starlink" will start internal testing within 3 months and public testing within 6 months, and will start from high-latitude areas. SpaceX's layout in the satellite field has attracted worldwide attention and attracted a large number of companies around the world to join the construction of satellite Internet.
Domestic progress is relatively slow: In 2015, my country's Aerospace Science and Technology Corporation and Aerospace Science and Technology Corporation launched the low-orbit communication projects "Hongyan Constellation" and "Hongyun Project" respectively. The "Hongyan Constellation" consists of 300 low-orbit small satellites and a global data service processing center. It has real-time two-way communication capabilities all-weather, all-time and under complex terrain conditions, and can provide users with global real-time data communication and comprehensive information services. The "Hongyun Project" plans to launch 156 satellites, operate in orbit 1,000 kilometers above the ground, build a global mobile Internet network on a satellite-borne broadband, and achieve global coverage of the network without distinction. Both projects are planned to be completed or put into use in 2020, and the overall progress is relatively slow at present.
Satellite Internet is included in new infrastructure and ushers in major development opportunities: On April 20, the National Development and Reform Commission press conference, and the official clarified the scope of "new infrastructure" for the first time, including three aspects: information infrastructure, integrated infrastructure, and innovative infrastructure.Among them, the information infrastructure includes communication network infrastructure represented by 5G, the Internet of Things, industrial Internet, satellite Internet, new technology infrastructure represented by artificial intelligence, cloud computing, blockchain, etc., and computing power infrastructure represented by data centers and intelligent computing centers. The satellite Internet was included in the category of communication network infrastructure for the first time, and as a new infrastructure, it was confirmed by the official diameter for the first time. We believe that with the rapid advancement of the external "Starlink" plan and the catalysis of the inclusion of internal satellite Internet into "new infrastructure", the construction of domestic low-orbit satellite Internet has ushered in major development opportunities, and the investment and speed may significantly exceed market expectations. Including satellite manufacturing, rocket launching, ground equipment and satellite applications, it is expected to benefit significantly. Relevant target recommendations are paying attention to China Satellite Communications, China Satellite, Tianyin Mechanical and Electrical, Zhenhua Technology, Yaoptoelectronics, Aerospace Electrical, Hongyuan Electronics, etc.
(III) Key targets
, AVIC Mechanical and Electrical (002013.SZ)
Company is a professional integration and industrial development platform for aviation electromechanical systems under the aviation industry. It undertakes the full value chain management of market development, design and research and development, production and manufacturing, after-sales service, and maintenance guarantee of avionics products. It provides aviation equipment with large professional supporting system products and occupies a leading position in the domestic avionics field. It mainly engages in the aviation electromechanical industry and related systems based on the development of core aviation technologies. Its current product spectrum covers hydraulic systems, fuel systems, aeronautical power systems, high-lift systems, weapons and suspension launch products and systems, car seat systems, air conditioning compressors, high-pressure oxygen chambers, isostatic presses and other aviation electromechanical related fields.
With the accelerated installation of aviation equipment and the increase in the proportion of aviation electromechanical systems in the entire machine, the company's endogenous growth is relatively certain. In addition, as a professional integration platform for the electromechanical systems of the Aviation Industry Group, the company has continuously promoted professional integration and capitalized operations in recent years. It has successively acquired and integrated enterprises such as Guizhou Fenglei, Guizhou Fengyang, Xinhang Industry and Yibin Sanjiang. The continuous acquisition has promoted the company's platform status as a full-time aviation electromechanical account. There are also high-quality enterprises and institutions such as Wuhan Instruments, 609 and 610 in the system. In 2019, it will dispose of 100% of the equity of Guiyang Aviation Motors, acquire 70% of the equity of Nanjing Hangjian, and invest in Hongguang Equipment to enjoy 36.55% of the equity. Further integration in the future can be expected. At the same time, by establishing a professional business department within the company, it integrates the internal scattered system, realizes the joint force of scientific research and production, improves resource utilization efficiency, and promotes the company's efficient operation.
, Aero Engine Power (600893.SH)
is the only domestic company that produces and manufactures all types of military aviation engines in turbojet, turbofan, turboshaft, turboprop and piston. It is one of the few companies that can independently develop aviation engine products in the world. It is the leader of my country's aero engine industry. It covers almost all the models of my country's aero engines and is the only domestic supplier of multiple models of engines.
The company's future business development trend is good. On the one hand, it comes from the accelerated installation of aviation equipment. On the other hand, with the accumulation of technology, product reliability is improved, and domestic substitution is expected to accelerate. In addition, with the increase in the number of aircraft engines and the increase in training tasks, the company's maintenance business is expected to grow rapidly. With the gradual construction of maintenance capabilities and continuous accumulation of maintenance experience, costs will decline and profitability will gradually increase. The establishment of AVIC Group and the implementation of major special projects will provide strong support for the company in institutional and mechanism reform and financial guarantee, and strengthen innovation capabilities through model development, key technology research and basic technology research, incubate new products and enhance corporate value. In addition, sufficient capital investment is expected to reduce the company's loan pressure, reduce financial expenses, and improve the company's performance.
, AVIC Shenfei (600760.SH)
Company achieved the overall injection of Shenfei Group through major asset restructuring in 2016. Shenyang Aircraft Corporation is one of the most core military assets in my country. It is known as the "cradle of China's heavy fighter jets". It is the earliest and largest modern fighter jet design and manufacturing base created by China.The main business includes three categories: military products, aviation and civilian products transfer business and non-aerospace products. In terms of military products, the main models currently produced by Shenyang Aircraft Corporation are the third-generation heavy fighter J-11, the twin-engine heavy carrier-based fighter "Feisha", the heavy multi-purpose fighter J-16, and the fourth-generation twin-engine medium stealth fighter FC-31, which are currently the main fighter jets in my country.
It is expected that the demand for new and replacement of fighter jets in our army will reach about 1,000 in the next ten years, and the company is expected to benefit fully. In 2018, the total number of Chinese fighter jets was 1,624, of which the proportion of second-generation fighter jets reached 46%, while the total number of American fighter jets was 1.7 times that of China, and all of them were third-generation and fourth-generation aircraft, which had a huge advantage over my country. At the same time, the proportion of models such as multi-functional fighter jets, aircraft carrier-based aircraft that can attack the sea in China is low. In the next 10 years, the new and replacement needs of our army's fighter jets will be around 1,000. As an important platform for carrying the development of my country's fighter jets, Shenyang Aircraft Corporation is expected to fully benefit from the historical opportunities of my country's fighter jet development. The reform of the military product pricing mechanism is gradually being implemented, and it may continue to reshape the military product procurement system and improve procurement efficiency. The company's voice as the main manufacturer company in the industrial chain will continue to expand. In addition, the company launched a long-term equity incentive plan with a validity period of 10 years in 2018 and implemented the first phase of the incentive plan. In the future, under the dual internal and external driving of pricing mechanism reform and equity incentives, the company's development potential is expected to be released.
, Aerospace Electrical Appliances (002025.SZ)
is a listed company under China Aerospace Science and Technology Corporation. Its main products include high-end connectors, relays, micro-motors, optoelectronics, cable components, etc., and are widely used in various fields such as aviation, aerospace, ships, weapons, nuclear energy, electronics, communications, medical care, rail transit, and new energy vehicles. In recent years, it has successively undertaken the development and production of major national projects and major supporting products such as manned space flight, lunar exploration, Beidou, large aircraft and high-resolution ground observation systems. It is a leading domestic military and high-end electronic components enterprise.
More than 70% of the products in the company's business are sold to military industries such as aerospace, aviation, electronics, ships, and weapons, basically achieving full coverage of the military industry. The five factors, including the stable growth of national defense military expenditure, the continuous optimization of military expenditure structure, the improvement of equipment informatization level, the domestic replacement of components, and the great development of the aerospace field, have kept the company's demand for military components strong; the company backed by the Aerospace Science and Technology Group and has been deeply engaged in the military industry for many years, creating a high technical barrier and having stable and extensive customer resources. Against the background of continuous upward industry demand, the company's military products business is expected to maintain a high prosperity development. Component products such as connectors, motors and optical modules are highly versatile and have a broader market in the fields of communications, new energy, etc. Relying on its technical accumulation in the aerospace field, the company has made significant expansion in civilian fields such as communications. In the future, it has great potential for expansion in the fields of new energy vehicle connectors, micro-motors and optical modules, which is worth looking forward to. In 2019, the company successfully completed the research and development supporting tasks of major national projects such as Long March 5 Yao San and Beidou, and ranked 24th among the top 100 electronic components in China in the year.
Company has a clear platform status and is the only listed company under the 10th Academy of Aerospace Science and Technology. The 10th Academy of Aerospace Science and Technology currently has 17 enterprises (including 1 listed company) and 6 public institutions. As the only listed company under the 10th Academy, the company is still expected to be asset integration in the future. In addition, Aerospace Science and Technology Group stated in 2019 that it would improve the interest transmission mechanism, improve the incentive mechanism based on actual performance, actively promote the implementation of medium- and long-term incentive measures such as equity incentives, and accelerate the construction of a diversified income distribution system of "salary + equity dividends". If the company can introduce incentives such as equity incentives and employee shareholding in the future, it is expected to stimulate employees' work potential and thus improve the company's operating level and profitability.
, AVIC Electric Testing (300114.SZ)
is the only listed company on the GEM under the Aviation Industry. It is divided into four major business segments: aviation and military industry, strain electrical test and control, intelligent transportation, and new measurement and control devices according to its business attributes. The business and products mainly involve aircraft measurement and control products and distribution systems, resistance strain gauge, strain sensor, weighing instrument and software, motor vehicle detection system, driver intelligent training and examination system, precision measurement and control devices, etc.
aviation equipment installation accelerates the company's aviation military demand, and the expansion of supporting aircraft models opens up the company's growth space: the company's aviation military business includes distribution management systems, measurement and control equipment, sensor instruments, etc., which are widely used in various aviation equipment. At present, my country's aviation equipment still has a big gap compared with Europe and the United States. In the future, benefiting from the growth of military expenditure and the tilt of military expenditure structure towards weapons and equipment, aviation equipment is expected to be accelerated. On the one hand, the company continues to enrich its product types, and on the other hand, it expands its application fields, from transport aircraft and helicopters to train aircraft and fixed-wing aircraft, the company's aviation military products business has further opened up.
strain electrical measurement and control traditional business remains stable, and the expansion of new fields is getting better: the company has been working in the field of strain electrical measurement for more than 40 years, with its technological strength in China. Its products include strain gauge, strain sensor and weighing instrument. Against the backdrop of the stable business in traditional fields, the company continues to expand its applications in consumer electronics, health care and other fields, especially in the consumer electronics field. After years of technical accumulation and supporting trials, the company finally achieved batch orders, and its related revenue increased rapidly from 40 million in 2016 to 104 million in 2018, becoming the company's new performance growth point.
Intelligent transportation business benefited from the outbreak of the motor vehicle testing industry. The intelligent driving test and training system has broad prospects: the upgrade of environmental protection standards, the increase in motor vehicle ownership and the increase in the number of drivers drive the demand for on-use vehicle testing, and the rapid growth of motor vehicle testing equipment. The demand for new and updated equipment in the next three years is expected to be more than 10 billion. The company's wholly-owned subsidiary Shijiazhuang Huayan is in a leading position in the motor vehicle testing industry and is expected to benefit fully.
actively promotes equity incentives to help the company's long-term development: the core personnel and business backbones of some subsidiaries have obtained the company's equity through different channels. Currently, the company continues to research and launch more effective employee incentives. On May 7, 2019, a plan to repurchase the company's shares was passed. The repurchased shares will be used for employee stock ownership plans or equity incentives. It is expected that the company's senior management and core backbone personnel will be fully mobilized to help the company's long-term development.
, AVIC Optoelectronics (002179.SZ)
Company's main products include electrical connectors, optoelectronic equipment, optical devices, cable components and other products. It is a leading enterprise in the domestic connector industry. It currently independently develops more than 300 series of various types of connection products and more than 250,000 varieties. As of the end of 2019, it has obtained more than 2,900 authorized patents, formulated and revised more than 380 industry standards, and ranked 14th among the top 100 electronic components companies in China in 2019. In 2019, there were 311 new patents, including 220 invention patents. Since its listing, the company's profit has grown steadily. The revenue CAGR has reached 22.47% in the past decade, and the net profit attributable to shareholders has reached 24.60%.
Company is based on military products business, and its growth is highly certain in the next few years. According to "China's National Defense in the New Era", by 2020, our army will basically achieve mechanization and make significant progress in informatization construction. The company's military products business accounts for about 55%, and its products are widely used in various equipment such as aviation, aerospace, weapons, ships, etc. With the increase in the degree of military informatization and the basically eliminated impact of military reform, the company's military products business is also expected to enter the fast lane.
Company actively expands its private product business and strives to develop communications and new energy vehicle business. The company's R&D expenses invested in recent years have accounted for about 8% of its revenue. The technology accumulation in the military industry has already occupied a place in the high-end civilian connector market.In the field of communications, the company has cooperated in depth with manufacturers such as Huawei, ZTE Kangxun, and Nokia, and has won the title of Huawei's "Gold Supplier"; in the field of new energy vehicles, the company's main customers include domestic new energy vehicle manufacturers such as BYD and Yutong, and has expanded to joint ventures and foreign-funded car companies. As the large-scale commercialization of 5G is approaching and countries have launched a timetable for banning traditional fuel vehicles, the company's private goods business is expected to expand rapidly.
, Hongda Electronics (300726.SZ)
Company is mainly engaged in the research, development, production and sales of military tantalum electrolytic capacitors. In recent years, its business scope has also expanded to other military electronic components such as ceramic capacitors and microwave components. The company currently has five domestic advanced tantalum capacitor production lines, with core technologies and patents for military capacitors such as high-energy tantalum hybrid capacitors, polymer tantalum capacitors, and is an important enterprise in the domestic military tantalum capacitor production field. Downstream customers cover aerospace, aviation, weapons, ships, electronics and other fields; their products are widely used in aerospace, aviation, ships, missiles, radar, weapons, electronic confrontation and other aerospace engineering, military engineering and weapons and equipment, and have strong industry competitiveness.
category expansion and superimpose field expansion, moving from a leader in tantalum capacitors to a multi-field and multi-variety electronic component group. On the one hand, as the leader in tantalum capacitors in the domestic high-reliability field, the company is expected to maintain stable and rapid growth thanks to the accelerated installation of equipment and the improvement of information level; on the other hand, the company continues to promote product expansion and application field expansion. In terms of category expansion, new products such as ceramic capacitors and microcircuit modules have achieved high-speed growth and contributed significant performance growth. In the future, categories including film capacitors, polymer chip aluminum capacitors, supercapacitors, inductors, resistors, microwave device components, circulators and isolators, power modules, I/F converters, power management chips, LTCC filters and other categories are expected to blossom in multiple points; in terms of application fields, it is also expected that single-layer ceramic dielectric capacitors and film circuits, circulators and isolators have entered the civil communication field. With the advancement of domestic production in the future, it is expected to further open up growth space.
, Torch Electronics (603678.SH)
Torch Electronics is a leading enterprise in my country's military and civilian high-end ceramic capacitors and a leading enterprise in the production of special ceramic materials. Its traditional capacitor business is divided into self-produced business and agent business. Self-produced business is mainly used in the military industry and high-end civilian fields, and agent business is mainly used in the ordinary civilian market. Since 2013, the company has laid out special ceramic materials, and its technical technology is currently at the leading level in China.
company has been deeply engaged in the field of military ceramic capacitors for many years and has extensive customer resource advantages and technical barriers. In the future, it is expected to maintain rapid development due to factors such as the stable growth of military expenditure, accelerated equipment installation, improvement of equipment informatization level, and domestic replacement of components. In addition, the company acquired 60% of the equity of Guangzhou Tianji Electronics in 2018. Tianji Electronics' main business is single-layer porcelain dielectric capacitors (SLC), which will help the company quickly enter the microwave device market, expand product categories, and complement existing products, further enhancing the company's competitiveness in the field of electronic components.
Company established its subsidiary Liyate Cauldron in 2013 to enter the field of high-performance ceramic materials. In 2015, a subsidiary, Liya New Materials, was established to implement high-performance ceramic materials industrialization technology projects. In 2016, the company raised 1.0265 billion through private placement, of which 826.5 billion was used for the industrialization project of CASAS-300 special ceramic materials. A 5-ton/year production line has been built. In 2017, a subsidiary, Liya Chemical, was established to be responsible for the production of ceramic raw materials, and the company's ceramic materials industry chain layout was further improved. Ceramic fiber materials have a broad application space in the aerospace field, and the company's related products are in an absolute leading position in terms of consistency and reliability. In the future, as the downstream products gradually become more stable, the ceramic new material business is expected to become the company's new performance growth point.
, Guangwei Composite (300699.SZ)
Company is a high-tech enterprise specializing in carbon fiber and carbon fiber composite materials. It has the full industrial chain layout of the carbon fiber industry "raw silk-carbon fiber-fabric-preg-composite material products".As a leading enterprise in the domestic carbon fiber industry, the company undertakes important national scientific research projects such as the Ministry of Science and Technology's 863 Plan, and has outstanding scientific research capabilities. In September 2017, the company was listed on the Shenzhen Stock Exchange and became the first carbon fiber stock in China. It raised 946 million yuan to invest in high-strength carbon fiber high-efficiency preparation technology industrialization, high-strength high-film carbon fiber industrialization, and advanced composite material R&D center. The company is the first private enterprise in my country to implement the domestic production of carbon fiber. After my country restarted the localization of carbon fiber in the 21st century, it took the lead in research and development and implemented the industrialization of carbon fiber, breaking the Western monopoly and blockade of my country's carbon fiber, and presided over the formulation of two national standards, the "Polyacrylonitrile-based carbon fiber" national standards and the "Carbon Fiber Prepreg" national standards, with leading industry status.
Military carbon fiber and fabrics are the company's core business. Under the guidance and encouragement of a series of applications and customers, after more than ten years of research and development, verification and productivity, it has broken foreign monopoly, effectively guaranteed the needs of the development of national defense equipment, and formed a stable supply situation of military products and established a market pre-income advantage. We believe that the stable supply of T300 products in the aviation and military products field in the future is expected to continue; the steady advancement of T800 is expected to benefit from the development and production of new generation military aircraft, and high-strength high-membrane fiber products benefit from the domestic substitution process in the aerospace field. At the same time, the company actively promotes integrated services for military carbon fiber, and its growth is worth looking forward to. In the civil field, the company established a technical research team in 2014 to start the process of wind power carbon beams; in 2015, it passed the certification of Vestas UK Laboratory, and successfully installed the test in 2016 and began mass supply; in 2017, the company had begun mass supply worldwide, with a supply value of 260 million yuan, becoming one of the main suppliers of Vestas carbon beams; in 2019, the carbon beam production lines increased to 50, and the revenue of wind power carbon beam business reached 673 million yuan, accounting for nearly 40%, making it an important source of revenue for the company.
0 and AVIC High-Tech (600862.SH)
have two major business segments: new aviation materials and intelligent equipment. The main products are composite raw materials (prepregs, honeycombs, etc.) and civil aircraft composite materials components, including steel brake disc pairs for aircraft, carbon brake disc pairs and other accessories, rail vehicle brake products, CNC machine tools and aviation special equipment, artificial bone joints, etc. Aviation composites are leading in China, and the medical field is comparable to international standards. Machine brake technology is included in the national plan, and equipment technical capabilities continue to be enhanced. After divesting the real estate business in 2019, the company has formed a business development pattern with new aviation materials and high-end intelligent equipment manufacturing as its main business, and is committed to becoming an "internationally competitive aviation materials and high-end intelligent equipment manufacturing enterprise."
Company will focus on the development of its main businesses in new materials and machine tool equipment in the future. On the one hand, the new materials business field will accelerate the expansion of production capacity, and on the other hand, the layout will be in the civilian field. The first phase of AVIC composite material Shunyi Production Park has been officially put into operation, the construction of the second phase project has been accelerated, the production management model has been continuously improved, and the production capacity has gradually expanded. At the same time, the company vigorously promotes the application and industrialization of aviation composite material technology in the fields of civil aircraft, automobiles, rail transit and new energy, and expands the international civil aviation market. In the field of machine tool equipment, in recent years, it has been affected by multiple factors from the external environment. Production slowdown is mainly due to digesting inventory. The company plans to continue to reduce losses in 2020.
1, Yingliu Co., Ltd. (603308.SH)
is a leading enterprise in the field of special equipment parts production. Its main products are pumps and valve parts, mechanical equipment components, and are used in high-end equipment fields such as aerospace, nuclear power, oil and gas, resources, and national defense and military industry. The company focuses on the research and development, manufacturing and sales of core components of high-end equipment. The manufacturing technology and production equipment have reached the leading level in China. The product exports are in more than 30 countries mainly in Europe and the United States, including more than ten Fortune 500 companies such as General Electric, Siemens, Caterpillar, Schlumberger and many national industry leaders such as Emerson.
company has been continuously promoting its layout in the field of two-machine blades in recent years, and has taken solid steps in the fields of high-end components and aviation technology.In 2015, the company acquired 100% of the equity of SBM Company and established Yingliu Hangyuan to promote the research and development and industrialization of small vortex engines; in 2016, it acquired Huoshan Jiayuan to implement the two-machine business at low cost; in 2018, it acquired 60% of the equity of Tianjin Hangyu, increasing its high-end aluminum alloy casting business; in addition, the company conducted two private placements in 2016 and 2019, focusing on the precision casting project of aircraft engines and gas turbine parts, and continued to increase investment in the two-machine blade field.
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(The report’s views belong to the original author and are for reference only. Report source: Huachuang Securities)
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