Aircraft maker Xi'an Aircraft International Corp yesterday posted a 312 percent surge in its 2008 net profit, driven by the booming plane-making business as the government pushes to develop its own larger jet.
The Shenzhen-listed firm said its net profit increased to 389 million yuan in 2008, on sales of 9.36 billion yuan.
The company's shares touched the 10-percent daily limit in Shenzhen yesterday to close at 22.2 yuan, extending this year's gain to 78 percent.
Xi'an Aircraft attributed its gains in 2008 to the country's ambitious plan to manufacture large jets, which has greatly benefited its aviation manufacturing business.
The plane maker delivered a total of 10 Xinzhou-60 aircraft, a small regional jet, to its clients last year, less than half of its yearly target, and manufactured 1,370 aircraft for its international customers, almost accomplishing its pre-set target of 1,409 units.
"Actually, it's not as good as the figures show since military aircraft production contributed to a lion's share of its profits," said Feng Fuzhang, an analyst with CITIC China Securities.
The company said it expected to chalk up about 8 billion yuan in sales this year, lower than the 9.36 billion yuan sales it recorded in 2008. The company also plans to deliver 20 Xinzhou-60 aircrafts this year, double that from last year's.
It announced on Feb 13 that it had inked a 3.26 billion yuan contract with Shanghai Aircraft Manufacturing Factory to make 15 ARJ21-700 regional aircraft for the latter and deliver five units this year.
China's leading aviation manufacturer, Aviation Industry Corp of China (AVIC), set up an aircraft production company in Xi'an, capital of Shaanxi province, on Feb 18, where Xi'an Aircraft, a subsidiary of AVIC, is also based.
"It will bring more orders to Xi'an Aircraft International Corp," said Xu Minle, researcher with Bank of China International.
"The new company will likely play a big role in the larger jet plan. And Xi'an Aircraft International Corp may become the unique partner for AVIC's new company," Xu added.
(China Daily March 4, 2009)