AECC AST(SH:600391) Changjiang Securities·2025-06-03 00:25Investment Rating - The report initiates coverage with a "Buy" rating for the company [9]. Core Viewpoints - The company is a core asset of China Aviation Engine Corporation (AECC) and has established a comprehensive industrial chain covering various aviation component categories. It has a strong competitive edge in the manufacturing of aviation engine parts, particularly in domestic and international markets [2][6]. - The company is expected to benefit from the domestic market's shift towards self-sufficiency in aviation engines, particularly in the context of large aircraft development, which presents significant market opportunities for domestic replacements [8][9]. - The company has a robust long-term growth outlook, driven by both domestic demand for military aircraft upgrades and international trade relationships that have been cultivated over two decades [7][9]. Summary by Sections Company Overview - The company is a key player in the aviation engine parts sector, with multiple subsidiaries that cover nearly the entire industrial chain. It specializes in components such as blades, casings, and sheet metal parts, and has a unique position as the only aviation bearing platform under AECC [2][6][19]. Domestic Market Potential - The domestic military aircraft market is expected to drive long-term growth for the company, with an estimated market space of approximately 792 billion yuan for aviation engine components over the next five years. The company is well-positioned to capitalize on the ongoing upgrades and maintenance needs of existing aircraft [7][52]. International Market Dynamics - The company has established strong customer loyalty through over 20 years of collaboration with leading international aviation firms, which is expected to support stable growth in its international business. The barriers to entry in this market are high, ensuring a competitive advantage [7][9][60]. Financial Projections - The company is projected to achieve significant profit growth, with net profits expected to reach 0.92 billion yuan in 2025, 1.47 billion yuan in 2026, and 2.29 billion yuan in 2027, reflecting year-on-year growth rates of 34.0%, 59.8%, and 55.3% respectively [9].