Aerospace Industrial Development Corp (AIDC, 漢翔航空工業) is expected to post increased earnings for last quarter due to an improving product mix, Yuanta Securities Investment Consulting Co (元大投顧) said on Saturday.
“The company’s gross margins would likely rise from 13.1 percent a year ago to 15 percent, propelled by higher margin overseas defense aircraft contracts,” Yuanta Securities Investment Consulting Co (元大投顧) analyst Livia Wu (吳靚芙) said in a report.
“We are also positive on the company’s ability to capture opportunities from a healthy global commercial aircraft market,” Wu said, adding that the company has a backlog of more than NT$100 billion (US$3.17 billion).
Photo: AFP
Amid rising global air passenger numbers, AIDC’s commercial aircraft backlog for Boeing Co reached 5,700 units, while backlog for Airbus Group SE rose 4 percent annually to 6,700 units, Wu said.
However, the company is expected to face increased operational expenditures due to rising research and development costs, Wu added.
Orders from the Republic of China Air Force for the Indigenous Defense Fighter and F-16 jets is expected to sustain sales growth momentum next year, Wu said.
Meanwhile, the government is likely to show a clearer direction regarding a NT$69 billion program to acquire a new fleet of air force trainer jets next month, AIDC management was quoted as saying in the report.
The government has been mulling a wholly indigenous development effort or cooperation with a foreign producer.
The program would provide a significant revenue stream between 2018 and 2025, Wu said.
Wu said the brokerage anticipates a foreign producer, adding that the government is likely to partner with Italian aeronautics company Alenia Aermacchi, which developed the M-346 two-engine transonic trainer aircraft.
AIDC reported that last month’s sales increased 6.74 percent sequentially to NT$2.24 billion, with aggregate sales in the first seven months rising 9 percent annually to NT$16.04 billion.
Shares of AIDC yesterday gained 0.23 percent to NT$43.4 in Taipei trading.
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