Investment Rating - The report maintains an "Accumulate-A" rating for AVIC Xi'an Aircraft Industry Group Co., Ltd. (000768.SZ) [1][7] Core Views - The company's profitability continues to improve, with a focus on expanding its presence in the civil aircraft market [1][5] - The company has increased its cost control efforts, leading to a rise in gross margin and net margin [5] - The company is well-positioned to capitalize on the rapid development of the domestic civil aircraft industry and is actively involved in international subcontracting [6] Financial Performance - For the first half of 2025, the company reported operating revenue of 194.16 billion yuan, a year-on-year decrease of 4.49% [4] - The net profit attributable to shareholders was 6.89 billion yuan, an increase of 4.83% year-on-year [4] - The gross margin improved by 1.38 percentage points to 7.27%, while the net margin increased by 0.32 percentage points to 3.55% [5] Market Data - As of August 26, 2025, the closing price was 28.91 yuan, with a market capitalization of 804.03 billion yuan [3] - The stock reached a yearly high of 32.64 yuan and a low of 21.06 yuan [3] Earnings Forecast - The expected EPS for 2025, 2026, and 2027 are 0.42, 0.48, and 0.57 yuan, respectively [7] - The corresponding PE ratios for these years are projected to be 69.9, 60.8, and 51.6 [7] Business Strategy - The company has developed components for all major domestic civil aircraft models and has achieved stable delivery of C919 components [6] - It is involved in international cooperation, manufacturing parts for Airbus and Boeing aircraft, with an expectation of increasing international subcontracting orders [6]

Investment Rating - The report maintains a "Recommended" rating for the company, citing its strong competitive position in the large aircraft sector and ongoing expansion in both domestic and international markets [4][6]. Core Insights - The company reported a revenue of 19.42 billion yuan for 1H25, a year-over-year decrease of 4.5%, while the net profit attributable to shareholders was 690 million yuan, reflecting a year-over-year increase of 4.8% [1]. - The company is actively expanding into new business areas, particularly in the domestic civil aircraft industry and international subcontracting [4]. - The company has seen a continuous improvement in profit margins, with a gross margin increase of 1.4 percentage points to 7.3% and a net margin increase of 0.3 percentage points to 3.5% in 1H25 [1]. Financial Performance Summary - In 2Q25, the company achieved a revenue of 10.98 billion yuan, down 7.5% year-over-year, but the net profit increased by 4.0% to 400 million yuan [1]. - The company’s operating cash flow improved, with a net cash flow from operating activities of -11.91 billion yuan, an improvement from -13.15 billion yuan in the same period last year [3]. - The report forecasts the company's net profit attributable to shareholders for 2025, 2026, and 2027 to be 1.146 billion yuan, 1.313 billion yuan, and 1.540 billion yuan, respectively, with corresponding PE ratios of 71x, 62x, and 53x [4][5].

Investment Rating - The investment rating for the company is "Buy" with a target price set for the next six months [7][18]. Core Views - The company reported a revenue of 10.36 billion in 2024, a year-on-year decrease of 10.6%, and a net profit of 640 million, down 52.2% year-on-year, primarily due to price adjustments by key model customers [1]. - The company is focusing on high-value areas in aviation, with commercial aviation revenue exceeding 1 billion, a 71% increase year-on-year, and a growing market share in key aviation models [2]. - The company is actively expanding into new fields such as civil aviation, commercial engines, aerospace, and deep-sea markets, with a long-term goal of achieving stable growth [4]. Financial Performance - In 2024, the comprehensive gross margin was 23.7%, down 7.59 percentage points year-on-year, and the net profit margin was 7.4%, down 5.84 percentage points year-on-year [1]. - The company’s revenue forecast for 2025 is 11.51 billion, representing an 11% year-on-year growth, with net profit expected to reach 1.26 billion, a 97.57% increase [5][6]. - The company’s operating cash flow was negative 80 million in 2024, a significant decline from 700 million in the previous year, primarily due to difficulties in sales collections [3]. Business Segmentation - The forging and casting business generated 8.27 billion in revenue, down 11.5% year-on-year, while the hydraulic and environmental control business achieved 1.84 billion, down 7.3% year-on-year [2]. - The company’s focus on research and development is evident, with a R&D expense ratio of 6.5%, supporting technological innovation and industry upgrades [3]. Future Outlook - The company aims to achieve a revenue of 11.5 billion in 2025, with a profit target of 1.3 billion, indicating a strong growth trajectory [4][5]. - The company is building a comprehensive material research and regeneration system, which is expected to enhance long-term profitability by potentially reducing material costs [4].