Welcome!

News Feed Item

AviChina Faced New Opportunites through Substantial Investment in Defense Stock

Hong Kong, May 23, 2014 - (ACN Newswire) - AviChina Industry & Technology Company Limited ("AviChina") (Stock: 2357.HK) earlier announced its largest-ever single investment together with China AVIC Avionics Equipment Co., Ltd., its non-wholly-owned subsidiary, in Sichuan Chengfei Integration Technology Co., Ltd's ("CITC") major assets restructuring. The two companies will subscribe for 100,300,000 shares and 33,100,000 new shares of CITC, respectively, at a consideration of not more than RMB1.665 billion and RMB550 million in cash. Upon completion, AviChina will hold a total of 8.45% equity interest in CITC, the largest share among Aviation Industry Corporation of China's affiliated enterprises which participated in this subscription. The major assets restructuring plan as disclosed by CITC includes purchasing the entire stakes in the three target enterprises, i.e. Shenyang Aircraft Corporation, Chengdu Aircraft Corporation and Jiangxi Hongdu Technology Corporation Limited owned by AVIC, China Huarong Asset Management Co., Ltd. and HONGDU Aviation Industry Group LTD.. The proposed asset acquisition is estimated to be valued at up to RMB15.847 billion, making it the single largest asset injection in A-share's the military industrial sector.

Backed with policies, AVIC will build China's Lockheed Martin
A new round of reform was initiated by the Third Plenary Session of the 18th CPC Central Committee among state-owned enterprises in China, in which, the reformation of military industrial enterprises is acting as a leading driving force of the SOE reform. The injection of core assets of aeronautic defense business by AVIC, AviChina's parent company, into the listed company demonstrates the open-up attitude of the authorities in charge of military industry as to the reorganization and listing of military industrial enterprises. Upon completion of the acquisition, CITC will integrate warplane assets which comprise the production, research and development of warplanes of the third and fourth generations, and assets related to air-surface missiles. By taking ownership of those defense equipment assets that are of utmost strategic significance in AVIC, it will be the first domestic-listed enterprise specialized in entire warplane production, comparable to Lockheed Martin in China. The reform in the national defense and the military industry, together with the advancement of the securitization of military industrial assets, will be a catalyst for the entire military industrial sector, which in turn will create a series of catalytic effect on the affiliated companies of AVIC, including subsidiaries such as AviChina and AVIC Avionics.

With business scope extended to defense equipment, AviChina targets to be China's answer to Boeing
AviChina is the only overseas-listed company of Aviation Industry Corporation of China and this assets reorganization will extend the Company's aviation business to cover defense equipment. AviChina has previously expanded its civil aviation manufacturing business through assets reorganization, merger and acquisition and has become the largest manufacturer of civil helicopters and a leading supplier of avionics systems in China. As the Company expands into the defense equipment sector, it is believed that it will help AviChina broaden its presence in the industry chain, optimize its investment portfolio and develop into China's answer to Boeing.

Major investment banks raised the ratings for AviChina considering the benefits that the company will continue to enjoy
The market's growing interests in the securitization of military industrial assets indicates an unprecedented development opportunity for the military industry sector in China. Investment in companies connected with the military industry will be the focus in 2014. Therefore, AviChina's substantial subscription will directly benefit from the appreciation of CITC. Based on the average P/E of the military industry sector of A shares, a huge sum of future earnings can be secured even on a conservative estimate. Subscription of CITC shares will also enable AviChina to participate in a more diversified aviation business, share the benefits brought by the continuous growth in China's national defense industry, integrate the current business with the defense assets, and facilitate the sound development of the overall industrial chain. Also, considering the continuous and stable growth of the existing business of AviChina, the profitability of the Company is expected to grow significantly. AviChina is the largest platform for assets integration under AVIC. Considering its importance and strategic position, Goldman Sachs, Citibank and BOCI raised the target price and maintained the "Buy" rating for AviChina.



Copyright 2014 ACN Newswire. All rights reserved.

More Stories By ACN Newswire

Copyright 2008 ACN Newswire. All rights reserved. Republication or redistribution of ACN Newswire content is expressly prohibited without the prior written consent of ACN Newswire. ACN Newswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Using new techniques of information modeling, indexing, and processing, new cloud-based systems can support cloud-based workloads previously not possible for high-throughput insurance, banking, and case-based applications. In his session at 18th Cloud Expo, John Newton, CTO, Founder and Chairman of Alfresco, described how to scale cloud-based content management repositories to store, manage, and retrieve billions of documents and related information with fast and linear scalability. He addres...
Akana has announced the availability of version 8 of its API Management solution. The Akana Platform provides an end-to-end API Management solution for designing, implementing, securing, managing, monitoring, and publishing APIs. It is available as a SaaS platform, on-premises, and as a hybrid deployment. Version 8 introduces a lot of new functionality, all aimed at offering customers the richest API Management capabilities in a way that is easier than ever for API and app developers to use.
Personalization has long been the holy grail of marketing. Simply stated, communicate the most relevant offer to the right person and you will increase sales. To achieve this, you must understand the individual. Consequently, digital marketers developed many ways to gather and leverage customer information to deliver targeted experiences. In his session at @ThingsExpo, Lou Casal, Founder and Principal Consultant at Practicala, discussed how the Internet of Things (IoT) has accelerated our abil...
Kubernetes, Docker and containers are changing the world, and how companies are deploying their software and running their infrastructure. With the shift in how applications are built and deployed, new challenges must be solved. In his session at @DevOpsSummit at19th Cloud Expo, Sebastian Scheele, co-founder of Loodse, will discuss the implications of containerized applications/infrastructures and their impact on the enterprise. In a real world example based on Kubernetes, he will show how to ...
With so much going on in this space you could be forgiven for thinking you were always working with yesterday’s technologies. So much change, so quickly. What do you do if you have to build a solution from the ground up that is expected to live in the field for at least 5-10 years? This is the challenge we faced when we looked to refresh our existing 10-year-old custom hardware stack to measure the fullness of trash cans and compactors.
SYS-CON Events announced today that Isomorphic Software will exhibit at DevOps Summit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Isomorphic Software provides the SmartClient HTML5/AJAX platform, the most advanced technology for building rich, cutting-edge enterprise web applications for desktop and mobile. SmartClient combines the productivity and performance of traditional desktop software with the simp...
The emerging Internet of Everything creates tremendous new opportunities for customer engagement and business model innovation. However, enterprises must overcome a number of critical challenges to bring these new solutions to market. In his session at @ThingsExpo, Michael Martin, CTO/CIO at nfrastructure, outlined these key challenges and recommended approaches for overcoming them to achieve speed and agility in the design, development and implementation of Internet of Everything solutions wi...
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
I wanted to gather all of my Internet of Things (IOT) blogs into a single blog (that I could later use with my University of San Francisco (USF) Big Data “MBA” course). However as I started to pull these blogs together, I realized that my IOT discussion lacked a vision; it lacked an end point towards which an organization could drive their IOT envisioning, proof of value, app dev, data engineering and data science efforts. And I think that the IOT end point is really quite simple…
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
Qosmos has announced new milestones in the detection of encrypted traffic and in protocol signature coverage. Qosmos latest software can accurately classify traffic encrypted with SSL/TLS (e.g., Google, Facebook, WhatsApp), P2P traffic (e.g., BitTorrent, MuTorrent, Vuze), and Skype, while preserving the privacy of communication content. These new classification techniques mean that traffic optimization, policy enforcement, and user experience are largely unaffected by encryption. In respect wit...
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.