Core Viewpoint - The company,航发控制, forecasts a significant decline in net profit for the fiscal year 2025, projecting a decrease of 52.02% to 58.02% compared to the previous year [1] Financial Performance - The expected net profit attributable to shareholders is estimated to be between 315 million yuan and 360 million yuan [1] - The basic earnings per share are projected to be between 0.2395 yuan and 0.2737 yuan [1] Factors Influencing Performance - The decline in net profit is attributed to several factors, including product price tax reforms, industry price adjustments, and increased tax burdens [1] - The company has also increased resource allocation to emerging sectors such as general aviation and commercial aviation, which has contributed to rising costs [1]

Core Viewpoint - The company,航发控制, forecasts a significant decline in net profit for the year 2025, projecting a decrease of 52.02% to 58.02% compared to the previous year [1] Financial Performance - The estimated net profit attributable to shareholders is expected to be between 315 million yuan and 360 million yuan [1] - The basic earnings per share are projected to be between 0.2395 yuan and 0.2737 yuan [1] Factors Influencing Performance - The decline in net profit is attributed to several factors, including product price tax reforms, industry price adjustments, and increased tax burdens [1] - The company has increased resource allocation to emerging sectors such as general aviation and commercial aviation, which has contributed to rising costs and expenses [1]

证券日报网讯12月24日，航发控制（000738）在互动平台回答投资者提问时表示，公司是国家定点专业 从事航空发动机控制系统研制生产的核心企业，公司研制生产的航空发动机控制系统可配装于中高端军 民用无人机的发动机，包括"秦岭"发动机等。 ...

Core Viewpoint - The company is a key enterprise designated by the state for the research and production of aviation engine control systems, which can be equipped on mid-to-high-end military and civilian drones, including the "Qinling" engine [1] Company Overview - The company specializes in the development and production of aviation engine control systems [1] - It is recognized as a core enterprise in the field of aviation technology [1] Product Application - The aviation engine control systems produced by the company are applicable to both military and civilian unmanned aerial vehicles (UAVs) [1] - The systems can be integrated with engines such as the "Qinling" engine [1]

Core Viewpoint - The company emphasizes the sustainability of its high-end equipment development, which is primarily based on continuous improvement in research and manufacturing capabilities [1] Group 1: Research and Development - The company is focusing on several key projects, including the research and development of aircraft engine control systems, rescue electric winches, oxygen systems, and the localization of critical components [1] - The company has ongoing projects in pre-research, research, and batch production stages [1] Group 2: Simulator Development - The subsidiary, Ansheng Company, has established partnerships with leading domestic eVTOL enterprises [1] - On December 12, 2025, the company successfully delivered a D-level full-motion flight simulator for the A320NEO model to Nanjing University of Aeronautics and Astronautics, marking a new chapter in "production, learning, research, and application" collaboration between industry and academia [1]

Core Insights - The defense and aerospace industry is experiencing sustained high demand, particularly in the two aircraft sectors and commercial aerospace, which are seen as new growth drivers [2][5][13] - The report highlights the increasing frequency of commercial space launches, with companies like SpaceX targeting a valuation of $1.5 trillion as they prepare for an IPO [5][14] - Investment opportunities are identified in various sectors, including domestic demand and overseas expansion, AI-driven upgrades in military technology, and the potential for new materials and technologies in aviation and space [5][15] Industry Overview - The report notes that the demand for high-end aviation equipment is expected to continue, with significant opportunities for domestic engine replacements in the civil aviation market [23] - The commercial aerospace sector is seeing a notable increase in aircraft deliveries, with a reported 44% year-on-year growth in the delivery of wide-body aircraft as of October 2025 [5][13] - The report emphasizes the importance of strategic partnerships, such as the long-term supply agreement between Yingliu Aviation and Ansaldo Energia, which marks a shift towards large-scale collaboration [5][13] Company Analysis - Companies like AVIC Shenyang Aircraft Corporation and AVIC Xi'an Aircraft Industry Group are highlighted for their potential to benefit from increased domestic and international demand [15][29] - The report discusses the strong growth prospects for companies involved in AI-driven military upgrades, recommending a focus on firms like Ruichuang Micro-Nano and AVIC Optoelectronics [15][18] - The financial outlook for key companies is optimistic, with projected earnings growth and favorable valuation metrics, such as a dynamic PE ratio of approximately 40X for Ruichuang Micro-Nano [18][19] Market Performance - The report indicates that the China Securities Military Industry Index has shown a weekly increase of 2.53%, with a year-to-date increase of 27.99% as of the report date [36] - The military sector has outperformed major indices, indicating strong investor interest and confidence in the defense and aerospace markets [36] Investment Recommendations - The report suggests focusing on companies that are well-positioned to capitalize on the expanding domestic and international markets, particularly those involved in military and aerospace technology [15][23] - Specific companies recommended for investment include AVIC Shenyang, AVIC Xi'an, and Ruichuang Micro-Nano, among others, due to their strategic positioning and growth potential [15][18][29]

Group 1: Business Outlook - The company expects a decline in revenue for 2025 due to peak demand for certain military products and tax policies, but long-term trends remain positive with new models and market expansions [2] - The military aviation power control business is driven by rapid growth in maintenance services and urgent demand for new models [2] - The company is actively pursuing opportunities in general aviation and international trade, aiming to increase market share despite short-term challenges from trade tensions [2][5] Group 2: Financial Performance - In 2024, the repair business revenue is projected to increase to approximately 16%, with a year-on-year growth of about 290 million [3] - International cooperation revenue grew by 5.48%, but gross margin slightly decreased due to rising material costs and increased R&D efforts [5] - Subsidiary West Control Technology reported revenue of 2.383 billion, a year-on-year increase of 2.28%, while Guizhou Honglin achieved revenue of 1.685 billion, remaining stable [6] Group 3: Product Development - The company is focusing on the development of high-end pumps and electro-hydraulic products, which are expected to support future revenue growth [2] - The company is advancing the development of various control systems for commercial engines, with significant progress in the Longjiang series [3] - The company is also exploring maintenance services for domestic aircraft like C919, which is expected to positively impact future performance [3] Group 4: Challenges and Risks - The company faces challenges with accounts receivable due to industry settlement characteristics, with approximately 90% of revenue coming from military products [7] - Operating cash flow turned negative in 2024, influenced by the timing of accounts receivable, but is expected to improve in early 2025 [7] - The company is navigating uncertainties in international cooperation due to potential impacts from U.S. tariff policies [5]