Monday, March 1, 2021
Martin Hennecke
HKEx Stock Code : 02357 
Corporate Profile
Principally engaged in the research, development, manufacture and sale of civil aviation products and automobile products.

Business Review - For the year ended December 31, 2012

In the year of 2012, global economy generally slowed down with an increased downward risk. The overall national economic performance was getting stabilized in a slow advancement, and the economic and social development realized a stabilized yet advancing development. Faced with the complicated situation at home and abroad, China aviation industry, as a strategic emerging industry listed in the 12th Five Year Plan for National Economic and Social Development of China (the ˇ§Twelfth Five-year Planˇ¨), actively implemented the development strategy and improved the quality and efficiency to lay a good foundation for overall revitalization of the industry. In 2012, AVIC, the controlling shareholder of the Company, was listed on the Fortune Global 500 for the fourth consecutive year with an accumulated advance in ranking of 116. It was also elected into the 500 Most Valued Brand in China for the first time.

Driving by a strong force of development of China aviation industry, the Group continued to push forward the established strategy, vigorously developed the aviation core business of the Group in the first year upon completion of the automobile business disposal and integration to realize a rapid growth of the business of the Group in 2012.

In 2012, the Group further improved its industry chain. The acquisition of Tianjin Aviation from the Company's controlling shareholder was completed and the operating results of Tianjin Aviation have been consolidated into the Company's financial results for the period, which brings new profit contribution to the Company. The acquisition has also enhanced the Company's manufacturing capabilities in aviation products and assemblies, and further completed the system of aviation business of the Company. Meanwhile, to actively put forward the reorganization and integration of the current aviation business, Hafei Aviation launched its helicopter business reorganization.

In 2012, the Company also completed its H shares placing and domestic shares issuance. In addition, AVIC Avionics smoothly completed its non-public offering of A shares. The non-public offering of A shares of China Aviation Optical-Electrical Technology Co., Ltd. (ˇ§JONHON Optronicˇ¨) has also received the approval of China Securities Regulatory Commission (ˇ§CSRC'') as of the date of this announcement.

In 2012, market influence and social concentration of the Group was significantly improved. Products of the Group made a successful show in the ninth Zhuhai Airshow and other international aviation exhibitions during the year. Mr. Lin Zuoming, chairman of the Board was rewarded the Most Influential Business Leader in China.

In 2012, the Group actively developed its helicopter products with remarkable achievement in market development. In December, Hafei Aviation signed sales agreements on Z-9 and fixed-wing aircraft which are expected to be delivered before mid-2014. EC175, which is jointly researched and developed by Hafei Aviation and Eurocopter of French, has completed the research stage and has started volume production. The Group is also proactively exploring the market development of other new helicopter products was also promoted.

In November 2012, Jiangxi Hongdu Aviation Industry Co., Ltd. (ˇ§Hongdu Aviationˇ¨) and China National Aero-Technology Import & Export Corporation signed a sales agreement on L15 advanced trainer in Zhuhai, pursuant to which, China National Aero-Technology Import & Export Corporation agreed to purchase 12 L15 trainer from Hongdu Aviation. The L15 pulse production line of Hongdu Aviation smoothly passed the test and evaluation.

In December 2012, Y-12F smoothly completed the plateau flight test successfully proving its good plateau performance. At present, Y-12 series aircraft have received new orders.

In June 2012, the assembling and manufacturing project for Legacy 600/650 Executive Jets by Harbin Embraer Aircraft Industry Co., Ltd. (ˇ§Harbin Embraerˇ¨), an associated company of the Group, received the approval from the National Development and Reform Commission. In the meantime, Harbin Embraer and ICBC Financial Leasing Co. limited signed a sales agreement for ten Legacy 650 Executive Jets in Rio de Janeiro, which included the confirmed order for 5 jets and the intended order for another 5 jets, with first executive jet expected to be delivered at the end of 2013. At the same time, Hafei Aviation signed a subcontracting agreement with Boeing Australia for the Boeing 737 aileron adjustment sheet project, which is the third related project between Hafei Aviation and Boeing indicating the continuing high degree of recognition of the Group by the partners in international cooperation.

During 2012, the Group continued to improve its technology research and development capabilities of its avionics products. AVIC Avionics and JONHON Optronic, as supporting units for the Shenzhou series, provided a strong support for the successful launch of Shenzhou-9. JONHON Optronic has completed the appraisal evaluations for 14 scientific and technological achievements, which are representatives of the latest research achievements on new product development of JONHON Optronic in the recent two years. Certain new scientific and technological products of AVIC Avionics also passed the airworthiness examination.

Business Outlook - For the year ended December 31, 2012

2013 is the tenth anniversary of the listing of AviChina. After several years' efforts in reorganization and acquisition, the revenue scale of its aviation business of the Company is constantly extended with a steady increase in profit and market share. The Chinese government has further clarified the strategy position of high-end manufacturing industry including aviation equipment. The progressive implementation of low altitude airspace reform brings a potential general aviation market. Good policy support and its stable market position will provide new room for the Company to explore a new market.

In this crucial period of realizing leapfrog development in the aviation industry, the Group will proactively face the opportunities and challenges, further improve the development strategies and fully promote a sustainable and steady growth in all its businesses.

1. Actively exploring the market, increasing the market share, enhancing the communication with customers and improving the sales and after-sales network establishment.

2. Seeking support from the parent company to strengthen the investment in order to promote the scale operation of aviation industry and industrialization of high technology, and maintain a stronger and core industry competitiveness.

3. Improving qualities of the existing helicopter products and insisting on retrofitting and upgrading to improve the existing helicopter series and striving for more helicopter orders.

4. Capitalizing on the development of general aviation policies to greatly expand the general aviation industry chain.

5. Focusing on research and manufacturing of large scale passenger aircrafts to promote the industry development, transformation and upgrading of avionics equipment system and aviation material and parts.

6. Adopting various ways of expanding aviation subcontracting to continuously improve the scope and level of cooperation in subcontracting manufacture.

7. Exploring international merger and acquisitions to extend and form a complete industry chain.

8. Comprehensively improving the management level to establish a highly capable and efficient corporate governance structure.

Source: AviChina Ind & Tech (02357) Annual Results Announcement
Chairman Lin Zuoming Issued Capital (shares) 2,356M
Par Value RMB 1 Market Capitalisation (HKD) 9,897M
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