Hafei shares 600 038 in aerospace class companies undervalued Money Tips

Category: Money tips Release Date: 2006-07-08

Source: Guangdong Cod Author: Wu is pleased to

Investment Points 1: [September 1, the company announcement equity firms has been a huge order]
September 1 announcement the company said August 31, 2006 the company shares of Harbin Embraer Aircraft Industry Co., Ltd. (company Zhangaigongsi 24.5% stake) and the Hainan Airlines Group Co., Ltd. signed a 50 ERJ145 regional aircraft sales contracts, contract List the total value of about 11 billion U.S. dollars. According to the contract, Harbin Embraer Aircraft Industry Co., Ltd. in September 2007 from the beginning to the end of 2010 the delivery of these aircraft.

Investment point 2: [firm orders adequate return on investment and business income into the high growth phase]
ERJ145 large orders have been significantly thickened per-share earnings this ERJ145 received 50 orders for all parts and components produced in Brazil, in the company's stake in Harbin Embraer Aircraft Industry Co., Ltd. assembly.

Currently, the company's assembly plant would be designed annual capacity of 24 copies, but by the lack of staff, the actual annual production capacity of 15 copies. At present, the company has begun to enter the real production.

Delivered last year, China Eastern's 5 ERJ145, each rack 22 million U.S. dollars, the company was 24.5% equity investment income 25.33 million yuan. The new orders for aircraft, prices were little changed, but the size and assembly with the assembly plant technicians working efficiency, Embraer's gross margin will be increased. In accordance with an annual delivery of 15 copies per year profit of 76 million yuan thickening, thickening of 0.19 yuan per share (based on the current 337 million shares, 15% tax rate).
Xinzhou-60 is mainly used at present exports, ERJ145 not constitute a threat, despite the ongoing research and development at the RJ21 will be competition in the domestic market there is a certain relationship, but the Brazilian regional aircraft of advanced R & D and production capacity is expected to continue beyond the ERJ145 in 2009 with the competitiveness, Embraer worth looking forward to continuing to grow capacity.

Investment Points 3: [Z9 production orders for the heavy task of arranging in 2010] Z9 series is derived from the 980 was first introduced in the French aerospace company "Dolphin" helicopters and patented technology, models for the 10-14 seat light twin helicopter fast in 1994 fully realized localization. After years of improvement and self-development, has all the performance well beyond the "Dolphin." Has now established an armed type, communication type, anti-smuggling-type models in 10 product lines. Is mainly used for the group production platform machine, machine group with force platform systems, equipment in our country's navy, army and air force to use helicopter gunships, helicopter gunships belonging to an international third-generation family.

Z9 platform machines annually produce about 40 is expected to deliver 45 copies of this year, with the Z9 series helicopter production project approved the gradual completion next year, will form a 60 Z9 platform for machine production capacity. In accordance with the sales of the price per aircraft platform, the calculation 30 million this year, sales of 13.5 billion yuan, up 1.8 billion next year. With raw material prices fall and volume production capacity is increased, gross margins will rise 1 to 2 percentage points.

According to the current orders, Z9 series of orders already scheduled by 2010, due to imports of composite materials and composite materials processing bottlenecks were less than the impact, Z9 series helicopter production project is put into production batch are still unable to meet customer demand, companies need to further expand the production Z9 capacity. At the same time, Z9 series of sales of company's main revenue has accounted for about 90% last year, gross margins have been reduced to 9.06%, gross margins rise 1 to 2 percentage points greater impact on the performance of the company. The company increased technical staff training, the introduction of this year alone more than 260 college students, to step up to nurture talent.

􀁺 composite parts processing and assembly capacity by absolute advantage in favor of the international aviation manufacturer father father in manufacturing, machining father advantage of Ming the public and the public through the introduction of the French Aerospatiale helicopter tooling design and manufacturing, the public at public father at the public, assembly riveting process, and composite materials, parts and components manufacturing and assembly capacity has reached international advanced level. One composite material parts and components manufacturing and processing capacity has an absolute advantage, applied to Z9 series, HC120, EC120 models such as large parts, the fuselage of the processing and assembly.

Despite the company's international subcontracting business in 2005 only about 30 million of revenue, but the company in the composite material processing and assembly father's absolute advantage has attracted Boeing, Airbus, Bell and other international aviation giants interest, entered as the Boeing, Airbus, Bell The global subcontracting chains. The company has been with Boeing, Airbus, Bell talks smoothly and is expected in 2007 will be significant progress. We believe that international outsourcing will become a performance increase in the future, we will closely monitor the progress of the international subcontracting operations.

Investment point 4: [South of public securities holdings during the year are expected to solve the problem worth looking forward to integration of air assets]
Company's shares in the secondary market suffering from plague South 85% of public holders of securities of the outstanding shares currently outstanding shares of the real is only about 20 million, making ownership structure in a non-normal state. With the South declared bankrupt according to the law of public securities and debt at the end of the public to enter, issue of the outstanding shares held by Hafei is expected to be resolved during the year. In spite of what the formula dispose of this part of the outstanding shares have not yet determined, but the current stock price close to the South cost of public securities holdings for the successful problem-solving conditions.

There are currently re-financing needs, a father used to continue to expand with the Z9 series helicopter, the international subcontracting business capacity and 6 tons of aircraft research and development, another father, Kazakhstan Air Group holds 24.5% of the shares are also taken into account . We are optimistic about re-financing for the acquisition through this part of the stake held by group companies, will further thickening of corporate profits, but also in joint-venture companies to increase their right to speak.

We understand that China Aviation Science and Technology Industrial Co., Ltd. began to consolidate its assets, according to asset class and car air assets in a series of classes integrating the current cars asset class to speed up the integration process, in 2004, the Harbin automotive, aerospace, and Dongandongli 3 large group into Harbin Aviation Industry Group, after 2005, Harbin Aviation Industry Group will then once again split into Harbin Automotive Industry Group and the Harbin Aviation Industry Group, the assets will be integrated into the Automotive Group vehicles, aero-engine business into the National Aviation Holding Company.

Are currently part of Harbin Aviation Industry (Group) Company of the air power company's main products include five series of aero-engine turboprop, straight 8, straight nine straight 11 helicopter transmission, and industrial gas turbine products and so on, profitability is more prominent, in accordance with AviChina's development plan, the future integration of this part of the asset to the relevant listed companies. Judging from the current layout of view, the most likely to enter the Hafei shares.

(Investment proposals and risk factors) expects EPS of 06-08 years were 0.30 yuan, 0.55 yuan and 0.75 yuan respectively, dynamic price-earnings ratio of 45 times, 25 times and 18 times that in the current class aerospace companies, valuation of partial low. South outstanding shares held by the public and the securities with an impact on investors, barriers to entry, at the same time solve the problem but also bring investment opportunities. Therefore, the Southern public problem-solving formula for the securities holdings became the company's major risk factors.