AECC AP(SH:600893) Guotou Securities·2025-09-08 08:09Investment Rating - The report assigns a "Buy-A" investment rating to the company with a 12-month target price of 46.38 CNY [6]. Core Views - The company's revenue for H1 2025 was 14.098 billion CNY, a year-on-year decrease of 23.99%, and the net profit attributable to shareholders was 0.92 billion CNY, down 84.57% year-on-year [1]. - The decline in revenue is attributed to changes in customer demand, product structure adjustments, and delivery shortfalls [1]. - The company is increasing R&D investments in response to rising downstream demand, with R&D expenses rising by 14.54% year-on-year [2]. - The subsidiary Liyang Power achieved a revenue growth of 16.67% year-on-year, marking a breakthrough in the general aviation power sector [3]. Summary by Sections Financial Performance - The company's revenue from aviation engines and related products was 12.888 billion CNY, down 24.89% year-on-year, while foreign trade exports generated 0.868 billion CNY, a decrease of 13.50% [1]. - The gross margin was 10.96%, a decline of 0.31 percentage points year-on-year, and the net margin was 1.07%, down 2.49 percentage points year-on-year [1]. - The company expects net profits for 2025, 2026, and 2027 to be 0.596 billion CNY, 0.934 billion CNY, and 1.176 billion CNY, respectively, with growth rates of -30.7%, 56.7%, and 26% [4]. R&D and Production - R&D expenses increased due to heightened research tasks, while financial expenses rose due to increased interest-bearing liabilities [2]. - The company has received production licenses for the AES100 engine, indicating a transition from R&D to mass production [3]. Market Position and Valuation - The company is positioned as a leading enterprise in the aviation engine product spectrum, with a target price based on a 3x price-to-book ratio for 2026 [4]. - Comparable companies in the industry have an average price-to-book ratio of 3.71 and 3.34 for 2025 and 2026, respectively [4].