Core Viewpoint - The A-share market experienced a collective pullback on September 26, but the military industry sector rebounded sharply, particularly the aerospace ETF (159227), which saw a 0.44% increase and a trading volume of 45.7 million yuan, indicating strong market interest in military stocks [1]. Group 1: Market Performance - The aerospace ETF (159227) is the largest in the market, tracking the National Aerospace Index, with a high concentration of military-related stocks, achieving a 97.96% allocation in the primary military industry sector [1]. - Key stocks within the ETF, such as Aerospace Technology, surged over 5%, with other companies like Aero Engine Corporation of China and AVIC Aircraft also showing positive movement [1]. Group 2: Industry Insights - According to Galaxy Securities, during the 14th Five-Year Plan period, the production of main battle equipment and the construction of new combat capabilities are advancing simultaneously [1]. - In the air force sector, the new generation of fighter jets is entering the deployment phase, with major manufacturers like AVIC Shenyang Aircraft Corporation and AVIC Chengdu Aircraft Industry Group collaborating on domestic upgrades [1]. - The ETF focuses on the military sub-sector of aerospace, covering a full industry chain that includes fighter jets, transport aircraft, helicopters, aircraft engines, missiles, satellites, and radar, aligning perfectly with the "aerospace integration" strategic direction [1].

Core Viewpoint - The military industry is experiencing a positive shift driven by advancements in AI technology, which is expected to enhance the role of military software within the equipment system and lead to significant changes across the entire military supply chain [1]. Group 1: Market Performance - On September 26, major stock indices continued to decline, while the military industry sector showed resilience, with the largest aerospace ETF (159227) rising by 0.97% and surpassing a trading volume of 100 million [1]. - Key stocks within the ETF saw significant gains, including Aerospace Technology rising over 10%, Huayin Technology increasing over 6%, and Aero Engine Corporation rising over 5% [1]. Group 2: AI Impact on Military Industry - The advancement of AI technology is expected to drive a dual-force impact on the military supply chain, with improvements in core software performance leading to profound changes in warfare dynamics and an increase in software demand across various downstream sectors [1]. - AI empowerment is anticipated to accelerate the deployment of unmanned equipment, which may lead to transformative changes in both upstream and downstream industries [1]. Group 3: ETF and Industry Composition - The aerospace ETF (159227) closely tracks the Guozheng Aerospace Index, with a high concentration of 97.96% in the primary military industry, making it the highest "military purity" index in the market [1]. - The ETF covers critical industry chain segments, including aerospace equipment, satellite navigation, and new materials, featuring leading companies in the military sector involved in large aircraft development, low-altitude economy, and commercial aerospace [1].

证券日报网讯航发控制（000738）9月23日在互动平台回答投资者提问时表示，截至2025年9月19日收 盘，公司股东人数为66888户。 ...

Group 1: Business Performance and Outlook - The repair business increased year-on-year in the first half of 2025, driven by the demand from main engine manufacturers and military training tasks [2] - The company expects the repair business to maintain a high level during the "14th Five-Year Plan" period due to sustained production and increased user training tasks [2] - The overall revenue and profit decline in the first half of 2025 was primarily due to the impact of tax reform policies [4] Group 2: Product Development and Market Expansion - The company is actively expanding its gas turbine business, with military gas turbine control systems already in batch delivery and ongoing development for civil applications in petrochemical and shipping sectors [3] - The company is focusing on high-end general aviation power and drone control systems, with a promising market outlook supported by national low-altitude economy policies [4] - The company aims to enhance its international cooperation and market share in civil aviation, leveraging the recovery of the international civil aviation market [3][5] Group 3: Financial Management and Investor Relations - The company has established a value management system and is focusing on core capability development to enhance intrinsic value creation [6] - It is actively engaging with investors through performance briefings and strategy meetings to improve interaction and trust with the capital market [6] - The company is committed to cash dividends as a return to investors while maintaining a dynamic value analysis mechanism [6] Group 4: Production and Delivery - The delivery pace of batch production products is consistent with the previous year, with a notable increase in revenue from repair products [9] - New research projects are accelerating, and the company expects delivery conditions in the third and fourth quarters to align with annual plans [9]

Core Viewpoint - The company is actively engaging in various business segments, including civil aviation, international cooperation, and derivative businesses, with a focus on expanding market share and enhancing brand influence amid the recovery of the aviation industry. Group 1: Civil Aviation Business - The company is a key player in the commercial aircraft supply chain, prioritizing resources to support the development and certification of commercial engines, expecting a positive impact on performance in the latter half of the 14th Five-Year Plan as domestic aircraft power systems are advanced [1] - The company aims to form a second growth curve by integrating into the large aircraft industry chain [1] Group 2: International Cooperation - The international cooperation business, which involves providing precision components for well-known foreign aviation companies, saw a revenue increase of 11.84% year-on-year in the first half of the year [1] - The company plans to seize opportunities from the recovery of international civil aviation to expand its market and enhance cooperation levels [1] Group 3: Derivative Business - In the first half of 2025, the derivative business generated revenue of 92.67 million yuan, with a slight decline due to customer demand shifts [1] - The company is adjusting its product structure and exploring new markets, such as general aviation power control, to positively impact performance [1] Group 4: General Aviation Power Business - The company is actively involved in the development of mid-to-high-end general aviation power products, with promising prospects due to low-altitude economic policies and infrastructure development [1] - The AES100 product has received production certification in collaboration with the main engine manufacturer [1] Group 5: Performance Changes - The decline in revenue and profit in the first half of 2025 is primarily attributed to the impact of tax reform policies [1] Group 6: Military Trade Business - The company is working with relevant parties to expand the foreign aviation power equipment market, with new opportunities arising from the demand for domestically developed high-performance aviation equipment [1] Group 7: Capacity Assurance - The company adheres to a "small core, large collaboration, specialization, and openness" system to strengthen internal capabilities and leverage external supply chains [1] - Current capacity is sufficient to meet production and repair tasks, with expectations for growth in the main business scale over the next 2-3 years [1] Group 8: Group Reform Progress - A new company, Wuxi Motion Control Technology Co., Ltd., has been established, with personnel transitions underway [1] Group 9: Equity Incentives - The company is implementing diverse incentive measures for key talents and exploring positive incentive mechanisms, with plans to disclose progress in accordance with regulations [1]

Group 1: Business Development and Revenue - The company is a key supporting unit in the commercial engine supply chain, focusing on the development of the Changjiang series engines and aiming to form a second growth curve through participation in the large aircraft industry [2] - In the first half of 2025, the company's international cooperation business revenue increased by 11.84% year-on-year, driven by contracts with renowned international aviation companies [3] - The company's derived business achieved revenue of 92.67 million yuan in the first half of 2025, slightly down due to customer demand shifts, but expected to positively impact performance through product structure adjustments and new market exploration [4] Group 2: Market Outlook and Strategic Initiatives - The company anticipates positive impacts on performance from the domestic production of large aircraft engines, particularly in the latter half of the 14th Five-Year Plan [2] - The company is actively participating in the development of high-end general aviation power and drone control systems, with a broad market outlook supported by national low-altitude economic policies [4] - The company is focusing on expanding its international outsourcing business market share and brand influence, leveraging the recovery of international civil aviation [3] Group 3: Challenges and Future Projections - The primary reasons for the decline in overall revenue and profit in the first half of 2025 were attributed to the impact of tax reform policies [5] - The company is optimistic about the future of military trade products, expecting new opportunities for exports of domestically developed high-performance aviation equipment [6] - The company plans to enhance its core capabilities to meet future business needs through precise investments and the implementation of ongoing construction projects [7]

Group 1: Business Outlook - Military aviation power control business is expected to continue growing due to rapid increase in maintenance services and urgent demand for new models [2] - The domestic civil aircraft sector is anticipated to positively impact company performance in the latter half of the 14th Five-Year Plan as the company integrates into the large aircraft industry chain [2][3] - The market for general aviation power products is promising, supported by national policies and infrastructure development [3] Group 2: Pricing Strategy and Cost Management - The company is focusing on user needs and enhancing resource coordination to address changes in the pricing system [4] - Key measures include technology upgrades, development of new product configurations, and cost reduction initiatives [4] - The derived business currently accounts for less than 5% of revenue, with a slight decline in revenue in the first half of 2025 due to customer demand shifts [4][5] Group 3: Revenue and Profit Trends - In the first half of 2025, the company reported revenue of 92.67 million, showing a slight decline year-on-year [5] - The decline in overall revenue and profit is primarily attributed to the impact of tax reform policies [6] - International cooperation business revenue increased by 11.84% year-on-year, although gross margin slightly decreased due to rising material costs [6] Group 4: Production Efficiency and Labor Productivity - The company achieved a labor productivity of 244,000 yuan per person, an improvement of 8.54% year-on-year [7] - Measures taken to enhance productivity include focusing on military products, improving quality assurance, and accelerating digital transformation [7] Group 5: Future Development and Market Expansion - The company is preparing for future growth in new models and repair services by adjusting investment projects [8] - The outlook for military trade orders is optimistic, with expectations of increased demand for domestic aviation equipment exports [8] - The company is actively expanding its international market presence and enhancing brand influence [6][8] Group 6: Corporate Governance and Incentives - The company is implementing a stock incentive plan to motivate key talent and align with market conditions [9] - Efforts are being made to establish a value management system in response to new requirements from the State-owned Assets Supervision and Administration Commission [9][10]

Group 1 - The stock price of AVIC Control has dropped by 2.82% on September 4, reaching 18.95 CNY per share, with a trading volume of 320 million CNY and a turnover rate of 1.27%, resulting in a total market capitalization of 24.923 billion CNY [1] - AVIC Control's stock has experienced a continuous decline for four consecutive days, with a cumulative drop of 10.15% during this period [1] - The company, established on June 20, 1997, specializes in the research, production, sales, and repair of aviation and aerospace engine control systems, as well as automotive and motorcycle parts [1] Group 2 - Among the top ten circulating shareholders of AVIC Control, a fund under the Fortune Fund ranks first, specifically the Fortune CSI Military Industry Leader ETF (512710), which newly entered the top ten with 15.1609 million shares, accounting for 1.15% of circulating shares [2] - The Fortune CSI Military Industry Leader ETF (512710) has a current scale of 11.914 billion CNY and has achieved a return of 10.35% this year, ranking 3505 out of 4222 in its category [2] - The fund managers, Wang Lele and Niu Zhidong, have tenures of 10 years and 118 days, respectively, with significant variations in fund performance during their management periods [2]

Investment Rating - The report assigns a "Buy-A" investment rating to the company with a 12-month target price of 28.35 CNY [7] Core Views - The company achieved its performance expectations with significant improvement in operating cash flow despite a slight decline in profitability due to the impact of military product VAT reform [2][3] - The company completed 51.61% of its annual revenue target for 2025 in the first half of the year, indicating a steady progress towards its goals [4] - The report anticipates net profits for the company to be 7.5 billion CNY, 8.3 billion CNY, and 9.4 billion CNY for the years 2025, 2026, and 2027 respectively, with growth rates of -0.6%, 11.4%, and 13.2% [5] Financial Performance Summary - For the first half of 2025, the company reported revenue of 2.736 billion CNY, a year-on-year decrease of 2.5%, and a net profit of 309 million CNY, down 34.32% year-on-year [1] - The revenue from the aviation engine and gas turbine control systems was 2.438 billion CNY, a decline of 3.05% year-on-year, while international cooperation business revenue increased by 11.84% to 205 million CNY [2] - The company's gross margin for the reporting period was 27.49%, down 3.6 percentage points year-on-year, and the net profit margin was 11.38%, down 5.44 percentage points year-on-year [2] R&D and Cash Flow - R&D expenses decreased slightly to 262 million CNY, a year-on-year decline of 14.75%, while selling and management expenses increased by 12.42% and 9.87% respectively [3] - The net operating cash flow improved significantly to 1.009 billion CNY, a year-on-year increase of 446.13%, attributed to increased cash receipts from sales [3] Subsidiary Performance - The subsidiary Beijing Hangke reported a slight increase in net profit by 3.81% year-on-year, while other subsidiaries experienced varying degrees of revenue and profit changes [4]

Investment Rating - The report maintains a "Recommended" rating for the company, indicating a positive outlook based on its market position and growth potential [4][6]. Core Views - The company achieved 52% of its annual revenue target in the first half of 2025, with total revenue of 2.74 billion yuan, reflecting a year-over-year decrease of 2.5%. The net profit attributable to shareholders was 310 million yuan, down 34.3% year-over-year, primarily due to the impact of VAT reform on product pricing [1][4]. - The company is positioned as a leader in the control systems for aviation engines and gas turbines, and despite facing challenges during the transition between old and new models in 2025, it is expected to benefit from the stable growth of new model production and the aftermarket [4]. Summary by Sections Financial Performance - In 2Q25, the company reported revenue of 1.39 billion yuan, a slight decrease of 0.3% year-over-year, with a net profit of 160 million yuan, down 22.8% year-over-year. The gross margin for 1H25 decreased by 3.6 percentage points to 27.5%, while the net margin fell by 5.4 percentage points to 11.4% [1][2]. - The company’s revenue from aviation engine and gas turbine control systems was 2.44 billion yuan, down 3.1% year-over-year, accounting for 89% of total revenue. International cooperation revenue grew by 11.8% to 200 million yuan, representing 7% of total revenue [2]. Cost and Cash Flow - The company’s operating cash flow improved significantly, reaching 1.01 billion yuan in 1H25 compared to 180 million yuan in the same period last year. The period expense ratio increased by 1.3 percentage points to 11.2% [3]. - As of the end of 2Q25, accounts receivable decreased by 3.9% to 5.3 billion yuan, while inventory decreased by 1.0% to 1.52 billion yuan [3]. Future Projections - The company is projected to achieve net profits of 755 million yuan, 838 million yuan, and 938 million yuan for the years 2025, 2026, and 2027, respectively, with corresponding price-to-earnings ratios of 36x, 32x, and 29x [4][5].