AviChina Industry & Technology, one of the Hong Kong-listed arms of the mainland's largest aircraft manufacturing conglomerate, said yesterday it would acquire a heavy-lift helicopter and jet engine business from its parent which would increase the company's worth fourfold over the next five years.
The announcement came after AviChina posted a 480 per cent leap in interim net profit to 397 million yuan (HK$453.44 million) from 8 million yuan the previous year.
Although the company has started to focus on aircraft manufacturing, the majority of the profit came from a deal in which a vehicle business was sold back to the parent - the Aviation Industry Corporation of China (Avic) - in exchange for an avionics electronics business.
'AviChina is the listing platform for Avic's aircraft manufacturing business,' said Tan Ruisong, vice-chairman of AviChina, and as such Avic would end up injecting all aircraft-related assets into the business under the consolidation process which involves 20-plus of the parent's listed companies.
Tan said the injection plan would also include the most profitable listed arm of Avic - Xian Aircraft International Corp - which supplies components for Airbus and Boeing. It trades on the Shenzhen Stock Exchange.
At present, AviChina has controlling stakes in several A-share listed companies such as Avic Hongdu, a general aircraft manufacturer; Avic Changhe, a light helicopter manufacturer, and Hafei Aviation Industry, which produces helicopters and general purpose aircraft.