Comments on military industry events: AVIC intends to merge with AVIC to form an airborne system listing platform_ Oriental Fortune Net

event:

  AVICAVIC ElectromechanicalReleased “About Planning for Significant Assets”reorganizationSuspensionannouncement》。

  AVICProposed absorption mergerAVIC Electromechanicaland set up an airborne system listing platform.AVICAVIC ElectromechanicalOn the evening of May 26, the “Announcement on the Suspension of Trading in the Planning of Major Asset Restructuring” was released.The transaction method is for AVIC Electronics to provide all of AVIC ElectromechanicalshareholderThe method of issuing A shares is to exchange shares to absorb and merge AVIC, and at the same time issue A shares to raise supporting funds. It is expected that the transaction plan will be disclosed within no more than 10 trading days. This major asset reorganization will form an important airborne system listing platform for the aviation industry and accelerate the development of the airborne system business.

The State-owned Assets Supervision and Administration Commission emphasized that it will continue to increase the injection of high-quality assets into listed companies. On May 18, the State-owned Assets Supervision and Administration Commission of the State Council was striving to deepen the reform of state-controlled listed companies.SOE reformThe three-year action model promotion meeting stated that it is necessary to continue to increase the injection of high-quality assets into listed companies. Group companies should systematically sort out unlisted and listed resources, and gradually inject existing unlisted high-quality assets into listed companies in a planned way based on the actual situation. , and can also be listed separately if necessary. It is necessary to prudently explore the spin-off and listing of eligible multi-sector listed companies, and support the spin-off and listing of subsidiaries that are conducive to rationalizing their business structure, highlighting the advantages of their main business, optimizing their industrial layout, and promoting value realization. To revitalize or withdraw from inefficient and ineffective listing platforms. We believe that,Military industryAs one of the core industries of the country, the industry willSOE reformplay an important role in.Currently our countryMilitary industryThe overall profitability of the group is low, while assetssecuritiesThe conversion rate is not high, and there are still a large number of high-quality assets outside the listed companies.along withSOE reformthe in-depth advancement ofMilitary industryThe pace of capital operation in the industry is expected to accelerate.

Military Industry Group AssetssecuritiesThere is still room for further improvement.From the perspective of total assets, according to statistics, the total assets of the top ten military industrial groups are currentlysecuritiesThe conversion rate was 48.3%, less than 50%, among which the aviation industry (72.3%), nuclear industry (64.7%), China Aviation Development (57.0%), China Electronics (56.1%),Chinese ship(49.4%), weapons and equipment (47.6%), China Electric Power (32.3%), weapons industry (31.2%),Aerospace Science and Technology(17.0%), Aerospace Science and Industry (14.7%). We believe that the overall asset securitization rate of many military industrial groups in my country is relatively low, mainly because there are a large number of high-quality assets such as research institutes in vitro, and there is huge space for asset securitization. In the future, it is expected that the asset securitization rate of major military industrial groups is expected to further increase.

A number of military listed companiesrepoOr increase the company’s shareholding.Aviation Industry Group on the 24th and 25th through the controlling subsidiary companyAVIC Hi-TechAVIC OptoelectronicsIt has increased its stock holdings, and will continue to increase its holdings of the company’s stock by no more than 75 million yuan in the next 6 months.aerospace rainbowThe first repurchase was implemented on the 25th, and 350,700 shares (accounting for 0.035% of the total share capital) were repurchased through centralized bidding transactions, with an average transaction price of RMB 16.07 per share. In addition, according to statistics, since March this year, a total of 15 listed companies in the military industry have issued announcements on repurchasing or increasing their company shares. We believe that the intensive repurchase and holding increase announcements by many companies show the recognition of the company’s value, the confidence in the company’s development prospects and the recognition of its long-term investment value. In addition, the repurchase and holding increase measures will help to enhance investor confidence and promote the long-term stable development of the company.

Suggested attention: Other targets that benefit from the reform of state-owned enterprises:AVIC Hi-TechAVIC OptoelectronicsAVICHongdu AirlinesZhongzhi Co., Ltd.Jianghang equipmentAviation powerFlight controlAerospace appliancesGuorui TechnologySi Chuang ElectronicsWait.

Risk warning: The progress of major asset restructuring is less than expected, and the reform efforts are less than expected.

(Article Source:China Merchants Securities

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