AECC AST(SH:600391) Tianfeng Securities·2025-04-28 14:23Investment Rating - The report assigns a "Buy" rating to the company, Hangfa Technology [6]. Core Viewpoints - Hangfa Technology has established itself as a core supplier in the aerospace engine sector over the past two decades, benefiting from both domestic and international demand [1][14]. - The company has shown a stable growth trajectory in revenue and profit, with a projected significant increase in net profit for 2024 [2][4]. - The demand for aerospace engines is expected to grow significantly, with the Chinese market projected to capture 21% of the global market share from 2023 to 2042 [3][46]. Summary by Sections Company Overview - Hangfa Technology was founded in 1999 and has developed into a key player in the aerospace engine components market, with a successful IPO in 2001 [1][14]. - The company has undergone significant transformations, including a stock reform in 2006 and a capital increase in 2011 to enhance its manufacturing capabilities [1][14]. Financial Performance - Revenue increased from 2.36 billion yuan in 2018 to 4.52 billion yuan in 2023, with a CAGR of 13.8% [2][21]. - The company anticipates a revenue decline to 3.85 billion yuan in 2024, primarily due to lower domestic demand, but expects a rebound to 4.46 billion yuan in 2025 [2][5]. - Net profit is projected to grow significantly, with a 43% increase expected in 2024 [2][4]. Market Demand - The commercial aerospace engine market is projected to see a total demand of approximately 649.7 billion USD in China from 2023 to 2042, with the C919 aircraft entering commercial operation [3][46]. - The demand for small to medium thrust turbofan engines is expected to rise due to advancements in drone technology and new fighter jets [3][4]. Profitability and Valuation - The company is expected to achieve revenues of 4.48 billion yuan, 5.45 billion yuan, and 6.85 billion yuan from 2025 to 2027, with corresponding PS ratios of 1.73, 1.43, and 1.13 [4][5]. - The target market capitalization is estimated at 11.211 billion yuan, with a target price of 33.96 yuan per share [4][6].