Investment Rating - The report initiates coverage with a "Buy" rating for the company [12]. Core Viewpoints - The company is a core asset of AECC and has established a comprehensive industrial chain covering various aviation component categories, demonstrating strong competitive advantages in both domestic and international markets [4][10]. - The company has a significant growth potential in the domestic market driven by military aircraft upgrades and maintenance demands, with a projected market space of approximately 792 billion yuan for aviation engine components over the next five years [8][51]. - The company has maintained strong customer loyalty through over 20 years of collaboration with leading international aerospace firms, positioning itself for stable growth in its foreign trade business [8][62]. - The company is strategically positioned to benefit from the domestic production of commercial aircraft engines, particularly in the reverse thrust nacelle systems, which are critical components of the propulsion system [9][10]. Summary by Sections Company Overview - The company is a key player in the aviation engine and gas turbine component manufacturing sector, with a history dating back to the "First Five-Year Plan" in China [22]. - It has multiple subsidiaries that cover nearly the entire industrial chain, enhancing its ability to supply a full range of aviation components [4][7]. Domestic Market Potential - The domestic military aircraft market is expected to provide long-term growth opportunities due to ongoing upgrades and new deployments [8][49]. - The aviation engine is classified as a high-value consumable, creating a sustained demand for replacement and maintenance services [49]. International Market Dynamics - The company has established high barriers to entry in the international market, with a lengthy qualification process for international commercial aviation engine customers [56][59]. - The foreign trade business has shown robust growth, with revenues increasing from 0.63 billion yuan to 15.19 billion yuan over 17 years, reflecting a compound annual growth rate (CAGR) of 21% [62]. Financial Projections - The company is expected to achieve net profits of 0.92 billion yuan, 1.47 billion yuan, and 2.29 billion yuan for the years 2025, 2026, and 2027, respectively, with year-on-year growth rates of 34.0%, 59.8%, and 55.3% [10]. Key Competitive Advantages - The company possesses advanced manufacturing capabilities and technologies, including high-efficiency adaptive processing and fatigue resistance techniques, which are essential for producing high-performance aviation components [28][31]. - The subsidiary, AECC Harbin Bearing, is the only aviation bearing product platform under AECC, highlighting its unique asset value in the market [62].

Investment 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].