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AVIC Aircraft to inject assets into arm for listing

By Liu Yiyu (China Daily)
Updated: 2009-11-06 08:39

A man looks up at a J-10 fi ghter jet outside the AVIC offi ce complex in Beijing. [China Daily]

AVIC Aircraft Corporation Ltd, a major subsidiary of Aviation Industry Corporation of China (AVIC), said it will go public by injecting assets into AVIC's Shenzhen-listed arm, Xi'an Aircraft International Corp, as part of its plan to complete an overall listing by 2011 amid a restructuring of China's aviation industry.

"We plan to complete the asset restructuring by the first quarter of next year and use Xi'an Aircraft International as the platform for the listing of AVIC Aircraft," Hu Xiaofeng, general manager of the AVIC Aircraft Corp, said on the first anniversary of AVIC yesterday.

Shares of Xi'an Aircraft International Corp had been suspended from trading since Nov 2 due to the planned restructuring and closed at 13.08 yuan ($1.92) before the suspension.

AVIC Aircraft will inject assets worth 8 billion yuan into Xi'an Aircraft International, Hu said, which is still subject to further value assessment.

Xi'an Aircraft International's profit and revenue plunged 93.57 percent and 33.34 percent, respectively, for the first nine months of this year, largely due to a decline in airplane sales.

The military aircraft business is the largest contributor to Xi'an Aircraft International's revenue, accounting for over 80 percent of its business; and this share could go up due to the sluggish sales of aircraft for civilian use, said Feng Fuzhang, an aviation industry analyst with CITIC China Securities.

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Some other analysts, however, have said the passenger aircraft business would replace its military aircraft sales as the largest share of the manufacturer's revenue.

Xi'an Aircraft International, which manufactures the MA600 turboprop regional aircraft, is expected to be a parts supplier to China's homemade large passenger plane, the C919, boosting expectations for the plane maker's passenger aircraft business.

The company is the listed arm of Xi'an Aircraft Industry (Group) Corporation that AVIC Aircraft owns. AVIC Aircraft Corp also owns six other member companies - the First Aircraft Institute, Shaanxi Aircraft Industry (Group) Co Ltd, AVIC Landing Gear Advanced Manufacturing Co, Xi'an Aviation Brake Technology Co Ltd, Shenyang Aircraft Industry (Group) Corp Ltd and Chengdu Aircraft Industry Corp.

AVIC Aircraft's key businesses include the design, production, marketing and servicing of large- and medium-sized transport aircraft, passenger aircraft and aircraft landing gear systems. It also does basic manufacturing technology research, contract design of components and production of large passenger aircraft for domestic and overseas customers.