AviChina Industry & Technology 2357

Re: AviChina Industry & Technology 2357

Postby winston » Tue Oct 15, 2013 8:12 am

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I recommended AviChina Industry & Technology (2357) a few times before. The firm supplies aircraft and aviation components, and the company is a beneficiary of rising national defense expenditure that has jumped 11percent this year to 720 billion yuan (HK$913 billion) from 2012. AviChina also manufactures helicopters and large passenger aircraft - both seen as key growth areas.

It can bank on strong support from its parent - AVIC - and may be in line for substantial asset injections, especially if the orders for large aircraft increase.

Citigroup has set a target of HK$4.70 on the stock. Following a recent correction to HK$3.89 from HK$4.40, the share price looks quite attractive.

Source: Dr Check, The Standard HK
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Re: AviChina Industry & Technology 2357

Postby winston » Thu Mar 06, 2014 5:29 pm

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Goldman Sachs prefers AVICHINA (02357.HK) as China national defense expenses accelerate

The Chinese Government will set aside RMB808 billion for national defense expenditure for 2014, up 12% from a year ago, Goldman Sachs said in a report.

Generally, China spends one-third of the budget on equipment purchases, 25% of which are spent on aviation products. This will become a major driver for the demand for military products of China Aviation Industry Group.

Goldman Sachs preferred AVICHINA (02357.HK) +0.400 (8.677%) Short selling $4.78M; Ratio 1.508% , Hafei Aviation Industry (600038.SH) and Xi'an Aero-Engine Corporation (600893.SH), all of which were rated Buy.

Source: AAStocks Financial News
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Re: AviChina Industry & Technology 2357

Postby winston » Wed Mar 19, 2014 5:46 am

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Avichina Industry and Technology (2357) is a stock you should look into if you think China's military expense will rise.

The group that builds and operates aircraft is trading at 35 times high its price-earnings ratio.

But future asset injection by its parent will be the main driving force for growth.

The stock has mostly been on an upward trend for the past few years. Perhaps you could accumulate on dips.


Source: Dr Check, The Standard HK
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Re: AviChina Industry & Technology 2357

Postby winston » Thu Apr 17, 2014 6:28 am

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President Xi Jinping recently reiterated the importance of national security.

Civil aviation products maker AviChina Industry & Technology (2357) stands to benefit from asset injections by its parent, Aviation Industry Corporation of China.

The stock has been on an upward trend for the past two years.

Recently, it had a 17 percent correction from its 52-week peak.

So now, it's a bargain.


Source: Dr Check, The Standard HK
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Re: AviChina Industry & Technology 2357

Postby winston » Mon Oct 13, 2014 9:05 pm

There’s never been a better time to invest in China’s military by Lars Henriksson

Starting in 2015 regulations are set to relax for low-altitude flying (below 1,000m) in a handful of provinces, followed by further reforms and improved infrastructure between 2016-20. The aim is to support growth in China’s general aviation markets.

At the end of last year, China’s total fleet size for civil helicopters and fixed-wing aircraft was 385 and 1,239 – equivalent to 4% and 1% of the US levels.

But these relaxed regulations are set to accelerate demand for both helicopters and fixed-wing aircrafts.

Our answer is have a look at AviChina Industry & Technology (2357 HK), China’s largest contract supplier of helicopters and avionics system.

As investors pour in, prices will soar

AviChina acts as the international platform for financing and acquisition of its parent group, Aviation Industry Corporation of China (AVIC) which holds a 54.6% stake (and interestingly Airbus Group NV (AIR FP), the Franco-German group, is a strategic partner and holds 5.0%).

We acknowledge that we are not the first to realise the potential. This year the stock has gained 35% and is trading at a PE of 28.4x FY15.

But there is an alternate way to value the stock.

AviChina controls four A-share listed subsidiaries which offers direct access to helicopter manufacturing and avionics: Hafei (600038.SS), Hongdu (600316.SS), Avionics (600372.SS) and CAOT (002179.SZ).

Based on a marked-to-market valuation of these A-share assets, the stock is trading at a discount to its sum-of-the-parts valuation. In mid-September, it was estimated to exceed HK9.00 – equivalent to a 45% discount according to Morgan Stanley.

The valuation gap is too wide. It should mean that this entry ticket to China’s defence boom can get even more pricey...

Source: The New World
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Re: AviChina Industry & Technology 2357

Postby winston » Mon Dec 15, 2014 10:12 am

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<Research Report>AVICHINA (02357.HK) target lifted to $7.2, rated Buy - BofA ML
Nov 5, 2014

Merrill Lynch stated that the share price of the listed China Defense subsidiaries of AVICHINA (02357.HK) escalated by 40% recently.

CITC (002190.SZ) may bring a potential gain of $1 per share.

Hence, the target price was rose from $5.2 to $7.2.

The rating of AVIChina was maintained as Buy.

Source: AAStocks Financial News
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Re: AviChina Industry & Technology 2357

Postby winston » Mon Dec 15, 2014 3:48 pm

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<Research Report>AVICHINA (02357.HK) target cut to $6.2, kept Buy - BofA ML

Merrill Lynch stated that the capital injection plan of Chengfai Integration was declined by State Administration of Science, Technology and Industry for National Defense (SASTIND).

However, the broker believed that incident will not affect the fundamentals and asset injection potential of AVICHINA (02357.HK).

The rating of the company was trimmed from $7.2 to $6.2 since Chengfai Integration will not place shares and hence there will be absence of investment gains for AVI China.

However, the rating was maintained at Buy due to future catalysts such as China increased military expenses to upgrade defense equipment.

Source: AAStocks Financial News
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Re: AviChina Industry & Technology 2357

Postby winston » Mon Dec 15, 2014 3:50 pm

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<Research Report>AVICHINA (02357.HK) initiated Buy with $6.5 target by UBS

UBS initiated the rating of AVICHINA (02357.HK) as Buy, with a target price of $6.5.

It is believed that there will be stupendous growth potential in helicopters and general purpose aircraft business, due to low penetration rate in the domestic market.

The broker estimated that the CAGR revenue will reach 15.5% in 2014-18 and there may be further upside due to M&A.

It is expected that the EPS CAGR will be 17.3% in the aforesaid period, sightly lower than market consensus.

Sorce: AAStocks Financial News
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Re: AviChina Industry & Technology 2357

Postby winston » Mon Jan 05, 2015 2:29 pm

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<Research Report>Citi: AVICHINA (02357.HK) target hiked to $6.5; bullish on aviation, defense stocks

Citigroup stated that AVICHINA (02357.HK) will continue to benefit from robust military spending, export opportunity and civil aviation increase.

The broker expected that the potential M&A will bring inorganic growth. The target price raised from $5.4 to $6.5, representing projected PE of 33x in 2015. The rating was Buy.

The research house expected that China's military spending is likely to record a double-digit growth next year, which may further speed up China's overseas investment strategies.

It is believed that AviChina could outperform its counterparts with excellent portfolio.

Source: AAStocks Financial News
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Re: AviChina Industry & Technology 2357

Postby winston » Tue Jan 27, 2015 1:59 pm

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<Research Report>AVICHINA (02357.HK) target lifted to $6.4; rated at Buy -Daiwa
Jan 15, 2014

In the latest research report, Daiwa expected investors' sentiment on AVICHINA (02357.HK) to remain positive in 2015, as a result of the possible introduction of supportive government policy as well as the chance of asset injections.

AviChina currently trades at a 46% discount to the total value of its A-share subsidiary.

Viewing that the company could be added to the Hang Seng Composite MidCap Index, the research house reaffirmed a Buy rating on it, with a 12-month target price of $6.4 (up from $5).

Source: AAStocks Financial News
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