Recently, the large aircraft field has witnessed a series of important developments, injecting powerful impetus into this industry. On June 14th, the Ministry of Industry and Information Technology and the National Natural Science Foundation of China signed a cooperation agreement to jointly establish the Large Aircraft Basic Research Joint Fund. On the same day, the first global C919 passenger plane with the serial number B-919A operated on flight MU5309 carrying 162 passengers, departed from Shanghai Hongqiao Airport and headed for Guangzhou Baiyun Airport, marking the official start of the fourth commercial scheduled route of C919.
In addition, on June 5th, the first refueling with sustainable aviation fuel (SAF) of the domestic commercial aircraft C919 and ARJ21 were successfully tested; On June 1st, China Eastern Airlines used the domestically produced large aircraft C919 to operate the MU7192 charter flight, flying from Hong Kong to Shanghai Hongqiao Airport, and completing the first commercial regional flight from Shanghai Hongqiao to Hong Kong and then back to Shanghai Hongqiao. On the evening of May 27th, the first aircraft of the 100 C919 newly ordered by China Eastern Airlines Group Co., Ltd. was officially received in Shanghai as the world's first user of C919.
The establishment of the joint fund means that more resources will be put into the large aircraft industry. Regarding the establishment of the current joint fund for basic research on large aircraft, some investors have expressed that fund investment may still focus on research projects of scientific research institutions and other institutions. Therefore, direct support for the wider market may not be significant, but related promotion effects may overflow. The large aircraft industry chain is relatively long, and the stimulating effect of the fund on the entire industry will spread outward.
Data shows that the large aircraft industry chain mainly consists of body manufacturing, power devices, airborne systems, parts, raw materials and other parts. At present, power devices are mainly equipped by foreign companies; the high profit margin of airborne systems has attracted many companies to participate. Parts include forging and casting parts, standard parts, electronic components, etc.; raw materials include aluminum alloy, composite materials, titanium alloy, high-strength steel, etc.
Looking ahead, Huatai Securities pointed out that the success and good operation of C919 marks China becoming the fourth country in the world capable of manufacturing large aircraft, and its cost-effectiveness advantage is expected to compete with Boeing and Airbus in the single-aisle aircraft field. Background of the long delivery cycle from Boeing and Airbus, the domestic airlines are expected to continue to increase their purchases of C919.
Huaxi Securities said that C919 has the advantage of being a latecomer, adopting more advanced technology and higher automation in overall design, and also has more advantages in future market potential. Huaxi Securities believes that C919 will gradually start to replace Boeing and Airbus single-aisle aircraft.
In terms of investment recommendations, Zheshang Securities is bullish on advanced manufacturing links and supporting links, and pays attention to autonomous and controllable and domestic substitution links:
1) Body manufacturing: AVIC Xi’an Aircraft Industry Group (the largest body supplier of C919), AVIC Helicopter (C919 tail and flaps); pay attention to Zhonghang Electronic Measuring Instruments (C919 nose).
2) Power devices: AECC Aviation Power (engine matching), AECC Aero-engine Control (engine control system).
3) Airborne system: pay attention to AVIC Jonhon Optronic Technology (connector), Beijing Andawell Science & Technology Co., Ltd. (cabin equipment), AVIC Airborne Systems (airborne system), Nanjing Quanxin Cable Technology Co., Ltd. (cable), Hefei Jianghang Aircraft Equipment Co., Ltd. (environmental control system).
4) Parts: pay attention to AVIC Heavy Machinery (aerospace forging parts), Xi'an Triangle Defense Technology Co., Ltd. (forging + section assembly), Chengdu Ald Aviation Manufacturing Corporation (parts), Guanglian Aviation Industry (composite materials tooling + parts).
5) New materials: pay attention to AVIC Aviation High-Technology Corporation (composite prepreg), China Composite Group (civilian carbon fiber), Fushun Special Steel Co., Ltd. (ultra-high-strength steel), Baoji Titanium Industry Co., Ltd. (titanium alloy), Western Superconducting Technologies Co., Ltd. (titanium alloy).
Related concept stocks:
AVIC is the only manufacturer in China that produces helicopters on a large scale and is also one of the main airplane manufacturers. Its main aviation products include various types of helicopters, trainers, general-purpose aircraft, aviation components, aviation electronic products, and accessories. Among the enterprises under AVIC Holdings, Jiangxi Hongdu Aviation Industry, Avicopter plc, AVIC Electronics, and Tianjin Aviation have all participated in the production of components for the C919 passenger plane. For example, AVIC Electronics has participated in the development and production of the C919 control board assembly, dimming control system, and integrated circuit breaker board, and is a systems-level supplier for the C919. Hongdu Aviation is responsible for the production of the front fuselage, mid-rear fuselage, and corresponding door sections of the C919 passenger plane.
Aluminum Corporation of China (Chalco) is a leading comprehensive aluminum company in the world nonferrous metals industry. Its member unit, Southwest Aluminum, is the first aluminum material production company in China that has been listed as a supplier of Commercial Aircraft Corporation of China (COMAC), and it is also the only company in China that can produce aluminum-potassium alloy materials.
AVIC Xi'an Aircraft Industry Group (000768.SZ): Recently, AVIC Xi'an Aircraft Industry Group revealed its investor relations activities record, showing that the company became the first listed company in the aviation manufacturing industry in China. It mainly engages in the research and development, batch production, maintenance and service of large and medium-sized aircrafts, as well as aviation components, undertaking the design, manufacturing, supporting, and servicing of body components of large and medium-sized civilian aircrafts such as C919, ARJ21, and AG600. It has long-term and stable cooperative relations. The company has the full process closed-loop manufacturing capability from raw material procurement, manufacturing, inspection, final assembly to delivery, and undertakes the manufacturing of various large and complex parts. As a C919 body structure supplier, AVIC Xi'an Aircraft Industry Group undertakes the manufacturing tasks of C919 outer wing box, mid fuselage (including the central wing) and other work packages.