Securities Daily | Nine SSE Companies under AVIC Hold Collective Performance Meeting to Make New Advances on High-Quality Development

Source: Securities Daily

On November 29, 2022, nine listed companies on the Shanghai Stock Exchange (SSE) under Aviation Industry Corporation of China, Ltd. (AVIC), including AVIC Industry-Finance Holdings Co., Ltd., China Avionics Systems Co., Ltd. and AVIC (Chengdu) UAS Co., Ltd., held a collective performance meeting themed "Build China into an aviation power and promote high-quality development" at the SSE Roadshow Center, which was simulcast on multiple platforms. At the meeting, the management of listed companies shared their development prospects, strategic plans and business performance via video and Internet interaction, and had in-depth exchanges on issues of concern to investors.

Through this collective performance meeting, listed companies under AVIC further strengthened communication and interaction with their investors, continued to build good investor relations, and better passed investors' opinions to the management. They improved internal governance with external supervision, and promoted the high-quality development of listed companies and even AVIC as a whole.

Solid performance with business highlights

Faced with the challenges of repeated pandemic and a complex and volatile external macro environment, several companies under AVIC had solid performance in the first three quarters of this year. Among the nine companies, six, including Hefei Jianghang Aircraft Equipment Co., Ltd. (688586.SH), AVIC Shenyang Aircraft Company Limited (600760.SH) and AVIC Heavy Machinery Co., Ltd. (600695.SH), achieved growth in both operating revenue and profit. Besides, some companies saw significant single-quarter improvements and made breakthroughs in their respective fields, maintaining a long-term positive momentum.

AVIC Shenyang Aircraft Company Limited realized operating revenue of 30.279 billion yuan, up by 20.58% year on year; and a net profit attributable to the parent company at 1.740 billion yuan, up by 22.56% year on year in the first three quarters. The major economic indicators hit new highs, suggesting a good momentum of development. China Avionics Systems Co., Ltd. posted operating revenue of 7.90 billion yuan, increased by 13.89% year on year; and a net profit attributable to the parent company at 0.695 billion yuan, increased by 20.85% year on year in the first three quarters, with growth in both operating revenue and net profit. According to unified planning, the subsidiaries of China Avionics Systems Co., Ltd. promoted development reform and professional integration on the basis of independent operation, so as to improve the efficiency and effectiveness of resource allocation, enhance core competitiveness, create industrial competitive synergy, cultivate and build leading domestic and internationally renowned avionics system suppliers.

In the first three quarters, AVIC Industry-Finance Holdings Co., Ltd. achieved a total operating revenue of 13.036 billion yuan and a net profit attributable to shareholders of listed companies of 1.873 billion yuan. The company reported a total operating revenue of 4.536 billion yuan in Q3, up by 2.52% year on year in the quarter. In the middle of this year, the AVIC UAV and Hubei Chaozhuo Aviation Technology Co., Ltd. invested by AVIC Industry-Finance Holdings Co., Ltd. were listed on the STAR Market and saw their share prices soar on their first day of trading. Both companies are the leading enterprises in the military industry sub-field.

Hefei Jianghang Aircraft Equipment Co., Ltd. realized a total operating revenue of 0.883 billion yuan, up by 21.99% year on year; and a net profit attributable to the parent company of 0.222 billion yuan, up by 12.30% year on year in the first three quarters, with increase in both operating revenue and net profit.

The booming of its listed companies epitomized AVIC's development. Over the years, AVIC's economic operation performed stably with growth, sought progress while maintaining stability and showed stable and improving quality, blazing a path of high-quality development. According to statistics, the AVIC's net profit grew from 9.9 billion yuan ten years ago to 16.9 billion yuan in 2021, with an average annual growth of 6.2%; its EVA grew from 5 billion yuan to 11.4 billion yuan, with an average annual growth of 9.6%; its total operating revenue grew from 300.6 billion yuan to 519 billion yuan, with an average annual growth of 6.26%; its total assets grew from 568.7 billion yuan to 1,238.3 billion yuan, with an average annual growth of 9.03%.

Strengthening interaction and communication with investors

Moving toward high-quality development

Based on the capital market, AVIC has achieved high-quality development. In terms of asset securitization, it has been at the forefront of the military industry, with 26 listed companies under its umbrella. This collective roadshow event of nine SSE-listed companies under AVIC is an important practice to implement the requirement of the State-owned Assets Supervision and Administration Commission to improve the quality of listed companies controlled by central SOEs, so that investors can further approach, well understand, see clearly and have confidence. Meanwhile, the event has attracted attention of a large number of market participants and institutional investors.

The development of aviation industry chain is highly dependent on the support from finance. At the performance meeting, AVIC Industry-Finance Holdings Co., Ltd. elaborated on how to empower the development of industry chain through industrial finance. First, relying on AVIC and with its own technical and background advantages, industrial resources and brand effect in the aviation industry chain, the company possesses the unique ability to "clearly see, actually access and accurately invest" in the military industry investment, which promotes the rapid development of its industrial investment business. Second, the company participates in the capital increase projects of AVIC International E-Business Inc., and actively builds industrial chain and supply chain financial platforms, so as to support the autonomy, safety and control of the industrial chain and supply chain of aviation and military industries. Third, the company leverages its advantages of complete financial businesses and provides a package of financial services such as angel investment, VC/PE, Pre-IPO, M&A fund, mixed ownership reform fund and financial leasing, which cover the investment, growth, maturity and exit periods of enterprise development.

In early November 2022, the SSE and AVIC signed a strategic cooperation agreement to strengthen exchange and sharing of information, and do a good job in the cultivation of enterprises for listing, the quality improvement of listed companies, the promotion of professional integration, training and exchange on capital market, and joint project research, thus establishing a solid mechanism for long-term cooperation. Also, the convening of the collective performance meeting is a concrete step to actively implement the strategic cooperation agreement, and is a key cooperation for the two sides to jointly promote the high-quality development of listed companies.