中 國 航 空 科 技 工 業 股 份 有 限 公 司
(A joint stock limited company incorporated in the People's Republic of China with limited liability)
(Stock Code : 2357)
Interim Report
CONTENTS
- Highlights of Interim Results
- Management Discussion and Analysis
- Disclosure of Interests and Other Information
- Consolidated Balance Sheet
- Balance Sheet of the Company
- Consolidated Income Statement
- Income Statement of the Company
- Consolidated Cash Flow Statement
- Cash Flow Statement of the Company
- Consolidated Statement of Changes in Shareholders' Equity
- Statement of Changes in Shareholders' Equity of the Company
- Notes to the Financial Statements
- Corporate Information
HIGHLIGHTS OF INTERIM RESULTS
The board of directors (the "Board") of AviChina Industry & Technology Company Limited (the "Company") hereby announces the unaudited interim results of the Company and its subsidiaries (collectively, the "Group") for the six months ended 30 June 2024 prepared according to the China Accounting Standards for Business Enterprises.
Revenue | RMB33,617 million |
Net profit attributable to the owners of the parent company | RMB1,251 million |
Earnings per share | |
- Basic and diluted | RMB0.157 |
Shareholders' equity attributable to parent company | RMB32,194 million |
INTERIM DIVIDEND
The Board proposed that no interim dividend would be declared and paid for the six months ended 30 June 2024.
2 | AviChina Industry & Technology Company Limited |
MANAGEMENT DISCUSSION AND ANALYSIS
BUSINESS REVIEW
In the first half of 2024, the international political and economic environment was complex, with unstable and uncertain factors constraining the improvement of international market demand. Although China's economy remained generally stable, the adverse effects brought about by changes in the external environment increased. Domestic effective demand was insufficient with an increase in uncertain and unpredictable factors. Confronted with the intricate international and domestic circumstances, Aviation Industry Corporation of China, Ltd.* (中國航空工業集團有限公司) ("AVIC") steadfastly promoted the construction of a modern aviation industry system. AVIC has been listed in the Fortune Global 500 for 16 consecutive years, ranking the 147th. Meanwhile, AVIC ranked the first on the Fortune Global 500 of Aerospace and Defense Industry.
In the first half of 2024, the Group remained committed to its strategic goals, seized strategic opportunities and persistently forged new advantages in sustainable competitiveness. The Group gathered its strengths and exerted strenuous efforts to propel its businesses steadily.
In the first half of 2024, the Group completed the integration of its helicopter business and successfully raised supporting funds of approximately RMB3 billion to provide capital support to its research, development and manufacturing operation, thereby enhancing the competitiveness of its helicopter products, expanding its market share and further promoting the long-term development of its helicopter business, dedicating to establishing a world-class helicopter company with excellent products, outstanding brands, cutting-edge innovation, and modern governance. Meanwhile, the Group actively explored low-altitude economic application scenarios, accelerated the transformation and application of high-speed electric vertical take-off and landing aircraft (H-eVTOL) technology achievements, and led the development of the aviation industry with scientific and technological innovation. The Group paid close attention to the development of strategic emerging industries and future industries, integrated internal and external advantageous resources, innovated cooperation mode, and cultivated new quality productive forces.
The improvement and modification of the Group's helicopter products promoted steadily. The AC313A helicopter completed its trial flight at high-cold condition, and the AC311A helicopter and AC312E helicopter participated in the "Emergency Mission·Tibet 2024" exercise to continuously improve the capabilities of the aviation emergency rescue system. The AC312E helicopter completed a diagnostic trial flight with an improved envelope, further enhancing the market competitiveness in products. The AC332 helicopter completed the static test of the entire helicopter, making progress in structural airworthiness verification.
Interim Report 2024 | 3 |
MANAGEMENT DISCUSSION AND ANALYSIS
The trainer business of the Group made further expansion. Jiangxi Hongdu Aviation Industry Co., Ltd.* (江西洪都航空工業 股份有限公司) accelerated the construction of a complete and effective system of technological innovation, expedited the transformation and implementation of technological outcomes, and made progress in the project approval and development of a number of products.
The Group persevered in a technology-driven and innovation-oriented development in its aviation ancillary system and related business. The basic devices industrial park of AVIC JONHON Optronic Technology Co., Ltd.* (中航光電科技股份有 限公司) was completed and put into operation to promote the construction of industrial clusters. The rotorcraft flight control system of Shaanxi Oriental Aeronautic Instrument Manufacture Co., Ltd.* (陝西東方航空儀錶有限責任公司) successfully passed the accreditation, and was certified as a "Shaanxi Provincial Manufacturing Champion Demonstration Enterprise for Single Item". The fire protection system laboratory of Tianjin Aviation Mechanical and Electrical Co., Ltd.* (天津航空機電有限公司) passed the extended accreditation of the China National Accreditation Service for Conformity Assessment (CNAS), which further enhanced the competitiveness in the field of aviation fire prevention and extinguishing.
The Group's aviation engineering services business grew steadily. China Aviation Planning and Design Institute Co., Ltd.* (中 國航空規劃設計研究總院有限公司) won the 16th "Gold Award of China's Construction Engineering Steel Structure", enhancing its technical advantages in the field of steel structures. It designed the project for Boeing Shanghai Aviation Modification and Maintenance Services Company Limited to support the development of aviation industry in Shanghai, and won the bid for the procurement project for engineering design services of Genertec Universal Medical Group Company Limited to penetrate into the medical and health field. It also won the bid for digital workshop construction project to expand its brand perception in the field of digital and intelligent aviation.
The modernization of the governance system and governance capabilities of the Group progressed steadily. The Group has adhered to its responsibility to ensure the harmonious development of the environment and the economy and society, actively implemented the "carbon peaking and carbon neutrality goals" strategy, propelled the green and low-carbon transformation across the entire industry chain, and dedicated itself to building an efficient, green and sustainable development pattern. The coordination of high-quality development and high-level safety has persistently improved the Group's corporate governance efficiency. The Group has also strengthened the market value management, while steadfastly pursuing value creation and shareholders returns, with its brand value continuously elevated.
4 | AviChina Industry & Technology Company Limited |
MANAGEMENT DISCUSSION AND ANALYSIS
BUSINESS OUTLOOK
In the second half of 2024, the domestic and international macroeconomic environment will still be marked by considerable complexity and uncertainty. As an emerging industry with great vitality and development potential worldwide, low-altitude economy is undergoing a process from technological exploration to widespread application. By virtue of its huge market demand, active policy guidance and complete industrial chain layout, China will become the core force in the development of the global low-altitude economy. With the continuous optimization of low-altitude airspace management policies, ongoing technological breakthroughs, and the continued release of market demand, China's low-altitude economy will experience broader market opportunities and a more diverse range of application scenarios. Meanwhile, the synergistic innovation between enterprises in the upstream and downstream of the industry chain, the deep involvement of capital markets, and the strengthening of cross-industry cooperation will jointly drive the high-quality development of China's low-altitude economy.
In the second half of 2024, the Group will seize the opportunities arising from the development of low-altitude economy and continue to adhere to its strategic goals, accelerating the building of itself as a world-classhigh-tech aviation industrial group, which leverage its robust aviation technology innovation capabilities, efficient and collaborative aviation manufacturing capabilities and all-encompassing industrial layout, to serve as the technology leader, manufacturing leader, and industrial leader in the low-altitude economy, and give play to its role in the realm of technological innovation, industrial control and safety support in a more effective manner, and contribute aviation power to accelerate the advancement of Chinese modernization:
1. Promote the feasibility study of investment projects for the research and production of helicopter products, and promote the construction of Tianjin Helicopter R&D Center and Civil Helicopter Base to build a world-class helicopter enterprise;
2. Seek cooperation with local governments in the field of low-altitude economy;
3. Amplify the expansion of strategically emerging industries, nurture and develop new quality productive forces, and promote the implementation of future industrial deployment;
4. Continue to advance the development of smart manufacturing capabilities and deepen the integration and innovative application of new-generation information technologies;
5. Continue to optimize capital composition and shareholding structure, and remain committed to value creation and shareholder returns; and
6. Comprehensively improve corporate governance capabilities and governance system, further promote eco-friendly aviation manufacturing, and integrate green development concepts into the overall layout of high-quality development.
FINANCIAL REVIEW
The business segments of the Group are divided into aviation entire aircraft segment, aviation ancillary system and related business segment, and aviation engineering services segment.
Interim Report 2024 | 5 |
MANAGEMENT DISCUSSION AND ANALYSIS
Revenue
42,000
36,000
30,000
24,000
18,000
12,000
6,000
0
Revenue
(RMB million)
40,873
33,617
First half of 2023 First half of 2024
For the six months ended 30 June 2024, the Group recorded a revenue of RMB33,617 million, representing a decrease of RMB7,256 million or 17.75% as compared with that of RMB40,873 million in the corresponding period of last year, which was mainly attributable to the year-on-year decrease in revenue of aviation ancillary system products and helicopter products.
Segment Information
Revenue of aviation entire aircraft segment
12,000
(RMB million)
10,000 | 9,747 | |||||||||
8,000 | 7,655 | |||||||||
6,000 | ||||||||||
4,000 | ||||||||||
2,000 | ||||||||||
0 | ||||||||||
First half of 2023 | First half of 2024 | |||||||||
Revenue of aviation ancillary system | Revenue of aviation engineering | |||||||||
and related business segment | services segment | |||||||||
30,000 | (RMB million) | 6,000 | (RMB million) | |||||||
26,893 | ||||||||||
24,000 | 5,000 | 4,580 | ||||||||
21,382 | 4,233 | |||||||||
4,000 | ||||||||||
18,000 | ||||||||||
3,000 | ||||||||||
12,000 | ||||||||||
2,000 | ||||||||||
6,000 | 1,000 | |||||||||
0 | 0 | |||||||||
First half of 2023 First half of 2024 | First half of 2023 First half of 2024 | |||||||||
6 | AviChina Industry & Technology Company Limited |
MANAGEMENT DISCUSSION AND ANALYSIS
For the six months ended 30 June 2024, the revenue of the aviation entire aircraft segment of the Group amounted to RMB7,655 million, representing a decrease of 21.46% as compared with that in the corresponding period of last year, which was mainly attributable to the decrease in sales volume of helicopter products during the reporting period. The revenue of the aviation entire aircraft segment accounted for 22.77% of the total revenue of the Group. The revenue of the aviation ancillary system and related business segment of the Group amounted to RMB21,382 million, representing a decrease of 20.49% as compared with that in the corresponding period of last year, which was mainly attributable to the year-on-year decrease in revenue of airborne products during the reporting period. The revenue of the aviation ancillary system and related business segment accounted for 63.60% of the total revenue of the Group. The revenue of the aviation engineering services segment of the Group amounted to RMB4,580 million, representing an increase of 8.20% as compared with that in the corresponding period of last year. The revenue of the aviation engineering services segment accounted for 13.63% of the total revenue of the Group.
For the six months ended 30 June 2024, the segment profit of the aviation entire aircraft segment of the Group amounted to RMB265 million, representing a decrease of RMB70 million or 20.90% as compared with that of RMB335 million in the corresponding period of last year, which was mainly attributable to the decrease in sales volume of helicopter products. The segment profit of the aviation ancillary system and related business segment of the Group amounted to RMB3,417 million, representing a decrease of RMB502 million or 12.81% as compared with that of RMB3,919 million in the corresponding period of last year, which was mainly attributable to the year-on-year decrease of revenue of aviation ancillary system products. The segment profit of the aviation engineering services segment of the Group amounted to RMB205 million, representing a decrease of RMB13 million or 5.96% as compared with that of RMB218 million in the corresponding period of last year.
Gross Profit
For the six months ended 30 June 2024, the Group recorded a gross profit of RMB8,143 million, representing a decrease of RMB1,603 million or 16.45% as compared with that of RMB9,746 million in the corresponding period of last year, which was mainly attributable to the decrease in revenue of aviation ancillary system products and helicopter products during the reporting period. The comprehensive gross profit margin was 24.22% during the reporting period, which was basically the same as compared with that in the corresponding period of last year.
Selling Expenses
For the six months ended 30 June 2024, the selling expenses of the Group amounted to RMB426 million, representing a decrease of RMB47 million or 9.94% as compared with that of RMB473 million in the corresponding period of last year, which was mainly attributable to the year-on-year decrease in the employee compensation of the Group's sales personnel. The selling expenses accounted for 1.27% of the revenue during the reporting period, representing an increase of 0.11 percentage point as compared with that of 1.16% in the corresponding period of last year.
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MANAGEMENT DISCUSSION AND ANALYSIS
Administrative Expenses
For the six months ended 30 June 2024, the administrative expenses of the Group amounted to RMB2,157 million, representing a decrease of RMB276 million or 11.34% as compared with that of RMB2,433 million in the corresponding period of last year, which was mainly attributable to the year-on-year decrease in the employee compensation of the Group's management personnel. The administrative expenses accounted for 6.42% of the revenue during the reporting period, representing an increase of 0.47 percentage point as compared with that of 5.95% in the corresponding period of last year.
Research and Development Expenses
For the six months ended 30 June 2024, the R&D expenses of the Group amounted to RMB2,031 million, representing a decrease of RMB520 million or 20.38% as compared with that of RMB2,551 million in the corresponding period of last year. The R&D expenses accounted for 6.04% of the revenue during the reporting period, representing a decrease of 0.20 percentage point as compared with that of 6.24% in the corresponding period of last year. During the reporting period, the Group's research and development projects have conducted orderly.
Finance Costs
For the six months ended 30 June 2024, the finance costs of the Group amounted to RMB-75 million, representing an increase of RMB76 million or 50.33% as compared with that of RMB-151 million in the corresponding period of last year, which was mainly attributable to the year-on-year decrease in interest income of certain subsidiaries. Details are set out in Note IV. 27 to the financial statements.
Net Profit Attributable to the Owners of the Parent Company
For the six months ended 30 June 2024, the net profit attributable to the owners of the parent company amounted to RMB1,251 million, representing a decrease of RMB292 million or 18.92% as compared with that of RMB1,543 million in the corresponding period of last year, which was mainly attributable to the year-on-year decrease in revenue of aviation ancillary system products and helicopter products.
Liquidity and Financial Resources
As at 30 June 2024, the cash and cash equivalents of the Group amounted to RMB26,996 million, which were mainly derived from cash and bank deposits at the beginning of 2024 and funds generated from business operations during the reporting period.
As at 30 June 2024, the total borrowings of the Group amounted to RMB17,505 million, of which short-term borrowings amounted to RMB9,089 million, current portion of long-term borrowings amounted to RMB2,325 million, and non-current portion of long-term borrowings amounted to RMB6,091 million.
As at 30 June 2024, the bank borrowings of the Group amounted to RMB4,780 million with an average interest rate of 2.4% per annum, representing a decrease of RMB639 million as compared with that at the beginning of the reporting period; and other borrowings amounted to RMB12,725 million with an average interest rate of 2.4% per annum, representing an increase of RMB4,988 million as compared with that at the beginning of the reporting period.
8 | AviChina Industry & Technology Company Limited |
MANAGEMENT DISCUSSION AND ANALYSIS
MORTGAGED AND PLEDGED ASSETS
As at 30 June 2024, the Group's total mortgaged and pledged borrowings amounted to RMB95 million, among which RMB92 million was mortgaged by house buildings with a net book value of RMB8 million and RMB3 million was pledged by notes receivable with a net book value of RMB3 million.
GEARING RATIO
As at 30 June 2024, the Group's gearing ratio was 9.43% (7.11% as at 31 December 2023), which was derived from dividing the total borrowings by the total assets as at 30 June 2024.
EXCHANGE RATE RISKS
The Group mainly operates in the PRC and most of its transactions are settled in Renminbi. The directors of the Company (the "Director(s)") are of the opinion that the exchange rate risks to the Group are not significant and will not have any material adverse impact on the Group's financial positions.
CONTINGENT LIABILITIES
As at 30 June 2024, the Group had no significant contingent liabilities.
MATERIAL ACQUISITIONS AND DISPOSALS
On 22 March 2024, a total of 142,129,270 A shares of AVICOPTER PLC* (中航直升機股份有限公司) ("AVICOPTER") have been issued by AVICOPTER in connection with the Proposed Restructuring, and the total number of issued shares of AVICOPTER has increased from 589,476,716 shares to 731,605,986 shares. By then, the Proposed Restructuring has completed. On 25 July 2024, a total of 88,287,227 A shares of AVICOPTER have been issued by AVICOPTER in connection with the Raising of Supporting Funds, and the total number of issued shares of AVICOPTER has increased from 731,605,986 shares to 819,893,213 shares, including the 5,885,815 A shares of AVICOPTER subscribed by the Company with a cash amount of approximately RMB200 million. By then, the Raising of Supporting Funds has been completed. For details, please refer to the announcements of the Company dated 23 December 2022, 9 January 2023, 15 March 2023, 18 July 2023, 15 September 2023, 22 March 2024 and 26 July 2024. Unless otherwise defined, terms used in this paragraph shall have the same meanings as those defined in such announcements.
Interim Report 2024 | 9 |
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AviChina Industry & Technology Co. Ltd. published this content on 19 September 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on September 19, 2024 at 09:26:09 UTC.
