Aerospace Industrial Development Corp (AIDC, 漢翔航空工業), the nation’s largest civilian and military aircraft maker, is considering doubling its capital expenditure for next year from its original plan of NT$2.4 billion (US$77.32 million) in the wake of stronger-than-expected replacement demand from airlines.
“We were not anticipating a bigger capital expenditure for next year until we received new orders in August and September,” company spokesperson Lin Nan-chu (林南助) told an investors’ conference yesterday in Taipei.
To meet the additional demand — mainly from Airbus SAS — AIDC is set to build an advanced composite material center before the end of the year, which should start mass production in the first quarter of 2016, Lin said.
That is in addition to its two major construction projects for next year — a maintenance hangar for Taiwan’s F-16 jets and an engine case manufacturing center, Lin said.
Advanced composite materials, which are lighter than metals, are now commonly deployed in building new-generation planes, as carriers replace their fleet with lightweight, energy-efficient planes.
As such, AIDC expects its advanced composite material center to generate about NT$900 million in annual sales after it starts mass production, Lin said. The firm received more than NT$40 billion in new orders this year, with 10 percent of that coming from Airbus, he said.
Last year, the company received NT$50 billion in new commercial aircraft orders.
It still has an order backlog of more than NT$100 billion, which the company plans to fulfill over the next five to 10 years and should be sufficient to drive its sales momentum during this period, Lin said.
Revenue for this year is likely to be the same as last year’s, he said.
Consolidated sales in the first 10 months of the year edged down 1.55 percent to NT$18.99 billion from a year earlier, AIDC said.
Net income was NT$1.18 billion, or NT$1.3 per share, for the first nine months of the year, down from NT$1.42 billion, or NT$1.56 per share, recorded a year earlier, the company said.
Yuanta Securities Investment Consulting Co (元大投顧) analyst Livia Wu (吳靚芙) yesterday forecast that AIDC’s commercial aircraft sales would grow by a compound annual growth rate (CAGR) of 15 percent from this year to 2016.
Wu has a “buy” rating on AIDC shares, with a price target of NT$38, implying 11.3 percent upside from yesterday’s closing price of NT$34.15 in Taipei trading.
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