Revenue boost for two mainland aviation firms on helicopter sales
Two aviation manufacturing units of state-owned Aviation Industry Corp of China (Avic) yesterday reported increases in revenue fuelled by growth in the helicopter business. Despite disappointment in net profit, market sentiment remains hopeful in anticipation of policy relaxation regarding general aviation in the mainland.
Revenue at Hong Kong-listed AviChina Industry and Technology rose 11.75 per cent to 10.4 billion yuan (HK$13 billion), which the firm attributed to growth in the helicopter and avionics business. Net profit grew only 0.54 per cent to 373 million yuan, missing market expectations.
Shanghai-listed Hafei Aviation Industry reported revenue of 5.44 billion yuan and net attributable profit of 152.6 million yuan, up 17.75 per cent and 16.91 per cent, respectively.
Both companies manufacture helicopters and aviation parts and components.
Kelvin Lau, an analyst at Daiwa Securities, said AviChina's recurring net profit showed an 11 per cent decline when compared with the restated figures in the same period last year.
"While market expectations for the period were low, we were expecting at least flat growth for net recurring profits," Lau said.
"We believe the positive sentiment on potential positive policies likely to be announced regarding general aviation development in China may provide share-price support to counter the weak results."
The mainland's National Airspace Management Committee has rolled out a draft regulation to open up airspace.
AviChina's shares in Hong Kong closed 1.87 per cent lower yesterday at HK$4.71, while Hafei Aviation's shares in Shanghai declined 0.71 per cent to 29.55 yuan.