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
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
With billions of sensors deployed worldwide, the amount of machine-generated data will soon exceed what our networks can handle. But consumers and businesses will expect seamless experiences and real-time responsiveness. What does this mean for IoT devices and the infrastructure that supports them? More of the data will need to be handled at - or closer to - the devices themselves.
New competitors, disruptive technologies, and growing expectations are pushing every business to both adopt and deliver new digital services. This ‘Digital Transformation’ demands rapid delivery and continuous iteration of new competitive services via multiple channels, which in turn demands new service delivery techniques – including DevOps. In this power panel at @DevOpsSummit 20th Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, panelists will examine how DevOps helps to meet th...
All organizations that did not originate this moment have a pre-existing culture as well as legacy technology and processes that can be more or less amenable to DevOps implementation. That organizational culture is influenced by the personalities and management styles of Executive Management, the wider culture in which the organization is situated, and the personalities of key team members at all levels of the organization. This culture and entrenched interests usually throw a wrench in the work...
Building a cross-cloud operational model can be a daunting task. Per-cloud silos are not the answer, but neither is a fully generic abstraction plane that strips out capabilities unique to a particular provider. In his session at 20th Cloud Expo, Chris Wolf, VP & Chief Technology Officer, Global Field & Industry at VMware, will discuss how successful organizations approach cloud operations and management, with insights into where operations should be centralized and when it’s best to decentraliz...
NHK, Japan Broadcasting, will feature the upcoming @ThingsExpo Silicon Valley in a special 'Internet of Things' and smart technology documentary that will be filmed on the expo floor between November 3 to 5, 2015, in Santa Clara. NHK is the sole public TV network in Japan equivalent to the BBC in the UK and the largest in Asia with many award-winning science and technology programs. Japanese TV is producing a documentary about IoT and Smart technology and will be covering @ThingsExpo Silicon Val...
@DevOpsSummit at Cloud taking place June 6-8, 2017, at Javits Center, New York City, is co-located with the 20th International 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 developm...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
Grape Up is a software company, specialized in cloud native application development and professional services related to Cloud Foundry PaaS. With five expert teams that operate in various sectors of the market across the USA and Europe, we work with a variety of customers from emerging startups to Fortune 1000 companies.
Financial Technology has become a topic of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 20th Cloud Expo at the Javits Center in New York, June 6-8, 2017, will find fresh new content in a new track called FinTech.
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, discussed the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docker c...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
Cloud Expo, Inc. has announced today that Aruna Ravichandran, vice president of DevOps Product and Solutions Marketing at CA Technologies, has been named co-conference chair of DevOps at Cloud Expo 2017. The @DevOpsSummit at Cloud Expo New York will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and @DevOpsSummit at Cloud Expo Silicon Valley will take place Oct. 31-Nov. 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that CollabNet, a global leader in enterprise software development, release automation and DevOps solutions, will be a Bronze Sponsor of SYS-CON's 20th International Cloud Expo®, taking place from June 6-8, 2017, at the Javits Center in New York City, NY. CollabNet offers a broad range of solutions with the mission of helping modern organizations deliver quality software at speed. The company’s latest innovation, the DevOps Lifecycle Manager (DLM), supports Value S...