AVICHM(SH:600765) SINOLINK SECURITIES·2024-10-31 02:41Investment Rating - The investment rating for AVIC Heavy Machinery is "Buy" (maintained) [3] Core Views - The acquisition of a 7.81% stake in Anji Precision Casting marks a significant step in the integration of the industrial chain for AVIC Heavy Machinery [3] - Anji Precision Casting has substantial growth potential, with revenues increasing from 410 million to 1 billion RMB from 2018 to 2023, representing a CAGR of 19.7% [3] - The company aims to transform from a leading aviation forging enterprise to a key player in aviation infrastructure, enhancing its casting capabilities and focusing on the core forging business [3] Summary by Sections Company Overview - AVIC Heavy Machinery plans to invest up to 130 million RMB to acquire a stake in Anji Precision Casting, increasing its ownership to 21.3% [3] - The company is positioning itself as a leader in the forging and casting industry, aiming to create a comprehensive ecosystem from material research to precision component delivery [3] Financial Forecasts - Projected net profits for AVIC Heavy Machinery from 2024 to 2026 are 1.568 billion, 1.885 billion, and 2.268 billion RMB, with year-on-year growth rates of 18.0%, 20.2%, and 20.3% respectively [3] - The expected P/E ratios for the same period are 22, 18, and 15 times [3] Market Positioning - The company is expected to benefit from the high demand in the aviation industry, particularly with the acceleration of military and commercial aircraft production [3] - AVIC Heavy Machinery is enhancing its operational synergy through strategic acquisitions and investments in upstream and downstream operations [3]