CON AERO TECH (00232) surged over 15% in morning trading. As of press time, the stock was up 15.19% to HK$0.182 with a trading volume of HK$15.73 million.
On the news front, CON AERO TECH plans to hold a board meeting on August 28 to approve its interim results. The company previously expected to record an after-tax profit of at least HK$55 million for the first half of the year, compared to HK$7.05 million in the same period last year. The significant improvement was mainly attributed to the completion of new factory facilities, deployment of new production equipment, and the gradual stabilization of new enterprise resource planning systems. Additionally, the continuous advancement of the "world-class manufacturing" production management system led to a notable increase in production capacity for general aviation aircraft piston engines in the first half, with order deliveries growing year-over-year, thereby driving the group's overall revenue and gross profit performance.
A research report released in May noted that CON AERO TECH is a leading global general aviation piston engine manufacturer. Based on 2024 new piston aircraft engine delivery volumes, the company achieved a 28% market share, up 2 percentage points from 2023, ranking second globally. The report highlighted that CON AERO TECH represents a rare target in the general aviation industry chain among Hong Kong-listed companies.
The company holds approximately HK$800 million in cash with no bank loans, and its cash holdings represent about 80% of its market capitalization. Excluding cash value, the historical price-to-earnings ratio stands at 3.5 times. The current valuation is believed to excessively reflect political risks related to the state-owned company's U.S. operations. As the company ranks second globally and serves as a major supplier to the U.S. market, the likelihood of significant disruption is considered low.
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