AECC Aero-Engine Power Co., Ltd. (AECC Aero-Engine Power) (600893)

Individual Stock Analysis Report | Industry: Complete Aero-Engine and Power Systems | Report Date: September 13, 2026 | Data as of the September 11, 2026 Close

This report was automatically compiled by AI based on public information and is for reference only. It does not constitute investment advice.

1. Executive Summary

AECC Aero-Engine Power serves as the listed platform for complete aero-engines under AECC, covering the entire lifecycle from R&D, manufacturing, final assembly, testing, sales and maintenance support. The company has high technological barriers and strategic importance. In the first half of 2026, the company recorded operating revenue of RMB 20.755 billion, up 47.21% year on year; net profit attributable to the parent of RMB 146 million, up 59.32%; and non-GAAP net profit attributable to the parent of RMB 202 million, up 424.91%. This indicates a phase of operational recovery driven by progress in production and deliveries, although the net margin was only approximately 0.8% and the profit scale remained small.

The company’s core aero-engine and derivative products business generated revenue of RMB 43.476 billion in 2025, with a gross margin of 8.50%. Revenue declined 3.37% year on year, while gross margin fell 1.04 percentage points from 2024, reflecting the continued impact of changes in customer demand, deliveries falling short of expectations and insufficient maturity of new products on profitability. In 2025, net profit attributable to the parent declined 26.27% year on year to RMB 634 million, while non-GAAP net profit attributable to the parent fell 62.81% year on year to RMB 294 million. Manufacturing-side margins and operating quality still have room for improvement.

Working-capital pressure is an important constraint on current financial performance. At the end of 2025, the carrying value of accounts receivable was RMB 44.448 billion, equivalent to approximately 95.9% of full-year operating revenue. At the end of the first half of 2026, accounts receivable and notes receivable totaled approximately RMB 53.25 billion, inventory was approximately RMB 37.83 billion, and net cash flow from operating activities was negative RMB 7.461 billion. Meanwhile, the top five customers accounted for 90.78% of 2025 sales, while the top five suppliers accounted for 55.05% of total procurement. Customer, supply-chain and fund-turnover concentration is relatively high.

At the September 11, 2026 close, the share price was RMB 41.61, approximately 17% above the August 19 level and above the MA5, MA10 and MA20. MACD was above the zero axis, indicating a relatively strong short-term technical pattern. However, RSI14 was close to 70, the share price was near the RMB 42.00–42.45 resistance zone, trading volume had declined after a volume-backed rise, and major-player funds had recorded consecutive net outflows recently. Based on the valuation data provided, static PE was approximately 172x and TTM PE approximately 159x, suggesting that the valuation already reflects a substantial portion of expectations for profit recovery.

2. Company Overview

2.1 Basic Information

2.2 Core Businesses and Product Portfolio

• Aero-engines and derivative products: covers the R&D, manufacturing, final assembly, testing, sales, maintenance and service support of aero-engines, gas-turbine complete units, components and parts. Products serve aircraft and vessels and extend into gas turbines, oil and gas, power and other fields. Revenue in 2025 was RMB 43.476 billion, accounting for the vast majority of the company’s core-business revenue, with a gross margin of 8.50%.
• Export processing and subcontracting: positioned in the middle of the international aero-engine industry chain, primarily producing aero-engine and gas-turbine components and undertaking trial production of certain new civil aero-engine components. Revenue in 2025 was RMB 1.951 billion, with a gross margin of 20.61%.
• Non-aviation products and other businesses: includes tooling, industrial property, certain civil products and other manufacturing businesses. Revenue in 2025 was RMB 232 million, with a gross margin of 25.61%; the business is relatively small.

2.3 Position in the Upstream and Downstream Value Chain and Cost-Profit Structure

AECC Aero-Engine Power is an important listed platform for complete-engine manufacturing under AECC. It can supply aero-engines, gas turbines, auxiliary power units and helicopter transmission systems, and covers the full lifecycle of R&D, manufacturing, final assembly, testing, sales and maintenance support. The company’s main business is positioned in complete-engine development, manufacturing and integrated support within the aero-engine value chain, while its export processing and subcontracting business is positioned in the midstream component-manufacturing segment of the international aero-engine industry chain.

• Major upstream inputs include aviation metals such as superalloys, titanium alloys, special steels and aluminum alloys; forgings, castings, blades, casings, shafts and disk blanks; electronic components, fuel and control-related components; and manufacturing resources including specialized equipment, tooling, testing equipment, outsourced processing, fuel and power, heat treatment and surface treatment.
• In 2025 manufacturing costs, direct materials amounted to RMB 21.640 billion, accounting for 52.14%; direct labor amounted to RMB 4.471 billion, accounting for 10.77%; manufacturing expenses amounted to RMB 13.485 billion, accounting for 32.49%; and special expenses and scrap losses amounted to RMB 1.908 billion, accounting for 4.60%.
• The company’s 2025 annual report did not disclose procurement amounts or supplier structure by specific material category, such as titanium alloys, superalloys or special steels. Therefore, the procurement share of any single material category cannot be confirmed.
• Procurement from the top five suppliers in 2025 amounted to RMB 19.506 billion, accounting for 55.05% of annual total procurement; procurement from related parties amounted to RMB 10.795 billion, accounting for 30.46%. The annual report did not disclose the names of the top five suppliers or each supplier’s share, so reliance on any single supplier cannot be assessed. The above concentration data relate to 2025 and should ultimately be determined by the latest annual report.
• The company does not possess complete pricing power over upstream materials and key supporting resources. In high-end aviation materials and specialized components, supplier qualifications, technical certification, quality stability and delivery capability are particularly important, giving suppliers relatively strong bargaining power in certain areas.
• Major cost-side factors include material prices and delivery, process maturity, yield rates, equipment utilization and the dilution of fixed costs.
• Major downstream customers include entities related to military aircraft, vessels and aviation equipment; AVIC and its aircraft OEM subsidiaries; research institutes and engine-support entities within the AECC system; commercial and general-aviation engine customers; international engine manufacturers and their Tier 1 suppliers; and customers in gas turbines, power, oil and gas and medical devices.
• Sales to the top five customers in 2025 amounted to RMB 42.060 billion, accounting for 90.78% of annual total sales; sales to related parties amounted to RMB 14.367 billion, accounting for 3.10% of annual total sales. The annual report did not disclose the names of the top five customers, so reliance on any single customer cannot be assessed further. The above concentration data relate to 2025; the specific figures are based on the 2025 annual report referenced in the research memorandum and should ultimately be determined by the latest annual report.
• Military products and domestic complete-aircraft supporting businesses generally adopt designated-model, fixed-pricing and planned-procurement mechanisms. Customer concentration is high and supplier entry barriers are high, but the company lacks complete free-pricing power in the short term.
• International subcontracting requires quality-system and supply-chain certification from international engine manufacturers such as GE, Safran and Rolls-Royce. Customer bargaining power is relatively strong, and order stability depends on quality, delivery capability and cost competitiveness.
• Gas turbines, general aviation and civil-engine businesses remain in market-expansion or model-industrialization stages. Future scale will depend on product maturity, airworthiness certification, supporting aircraft models and mass-production progress.
• Revenue from aero-engines and derivative products declined 3.37% year on year in 2025. The company attributed the decline mainly to changes in customer demand and deliveries falling short of expectations. The decline in segment gross margin was also related to the need to improve new-product maturity.
• As of December 31, 2025, the carrying value of consolidated accounts receivable was RMB 44.448 billion, compared with RMB 35.720 billion at the end of 2024; 2025 operating revenue was RMB 46.331 billion. On a static basis, year-end accounts receivable divided by full-year operating revenue was approximately 95.9%; accounts receivable were approximately 7.0x 2025 net profit attributable to the parent of RMB 634 million; accounts receivable increased by approximately RMB 8.728 billion year on year, or approximately 24.4%. This ratio is not equivalent to accounts-receivable turnover days or the actual collection cycle. The company’s annual report identified the high level of “two-fund” usage and working-capital pressure as financial risks. At the end of 2025, accounts payable and notes payable to entities within the AECC system were RMB 7.621 billion and RMB 5.875 billion, respectively, indicating that the internal supply chain performed part of the settlement function. Accounts receivable and payable balances alone cannot establish an absolute conclusion regarding bargaining power with upstream or downstream parties.
• Industry-chain concentration is relatively high: the top five suppliers accounted for 55.05% of annual total procurement in 2025, while the top five customers accounted for 90.78% of annual total sales. These figures are based on 2025 and sourced from the 2025 annual report referenced in the research memorandum. As the annual report did not disclose specific customer and supplier names or individual shares, reliance on any single customer or supplier cannot be further verified. The latest annual report should be regarded as authoritative.

AECC Aero-Engine Power occupies the high-technology complete-engine manufacturing and full-lifecycle support segments of the aero-engine industry chain. Its strategic importance and entry barriers are high, but manufacturing gross margins are currently relatively limited. In the short term, it is not a typical high-margin company with strong pricing power. Future margin improvement will depend primarily on new models entering stable mass production, higher product maturity and yield rates, better delivery efficiency, fixed-cost dilution, supply-chain and manufacturing-cost optimization, and a higher contribution from high-value-added civil aero-engines, general-aviation power, gas turbines, export subcontracting and maintenance support.

3. Financial Data and Valuation Analysis

3.1 Recent Operating Performance

The 2026 interim report was disclosed on August 24, 2026, with financial data as of the end of June 2026. Basic EPS for the first half of 2026 was RMB 0.05, compared with RMB 0.03 in the same period of the prior year; net cash flow from operating activities was negative RMB 7.461 billion, compared with negative RMB 9.168 billion in the same period of the prior year; period-end net assets attributable to the parent were RMB 40.168 billion, and period-end total assets were RMB 132.957 billion.

Revenue grew rapidly in the first half of 2026 and reached a new half-year high since the company’s listing. However, consolidated gross margin was approximately 9.0%, down approximately 1.9 percentage points year on year; net profit attributable to the parent remained small, with a net margin of approximately 0.8%. As of the end of June 2026, accounts receivable and notes receivable were approximately RMB 53.25 billion, inventory was approximately RMB 37.83 billion and contract liabilities were approximately RMB 6.36 billion. Operating cash flow remained substantially negative, requiring continued attention to financial quality and working-capital management. The company’s 2026 operating targets are operating revenue of RMB 49.949 billion and net profit attributable to the parent of RMB 524 million.

3.2 Earnings Forecasts

Institutional forecasts are as of September 11, 2026, sourced from THS aggregates and brokerage research reports. Within the past six months, 17 institutions had issued forecasts for 2026 results. Publicly verifiable consensus expectations for revenue are incomplete. Revenue data mainly come from forecasts by individual institutions, namely Caitong Securities and Guosen Securities, and the company’s operating target, and should not be regarded directly as full-market consensus expectations. Institutional forecasts and ratings are not formal earnings commitments by the company.

3.3 Valuation and Institutional Ratings

The September 11, 2026 closing price was RMB 41.03, total shares outstanding were approximately 2.666 billion and total market capitalization was approximately RMB 109.4 billion. Based on 2025 EPS of RMB 0.24, static PE was approximately 172x. Based on TTM net profit attributable to the parent of approximately RMB 689 million, TTM PE was approximately 159x. Based on net assets attributable to the parent of RMB 40.168 billion at the end of June 2026, PB was approximately 2.72x. Based on average institutional earnings forecasts, forecast PE was approximately 180x for 2026, 138x for 2027 and 109x for 2028. According to Lixinger data on September 9, 2026, when the share price was RMB 41.37, PE was approximately 160.10x, PB approximately 2.75x and total market capitalization approximately RMB 110.276 billion, broadly consistent with the above estimates. The current valuation reflects relatively high expectations for profit recovery and is highly dependent on future deliveries, gross-margin recovery and the realization of businesses such as civil aero-engines and gas turbines. In terms of target prices, the Futu aggregate average was RMB 52.20, with a range of RMB 42.11–58.00; Huatai Securities’ target price was RMB 52.76; and publicly available research-model target prices ranged from RMB 45 to RMB 55. However, the valuation methods and base dates used by different data sources may differ, so direct comparison is inappropriate.

4. Recent News and Announcements

4.1 Asset Transfer Proposal Approved by Shareholders at a High Approval Rate

On September 11, 2026, the company held its third extraordinary general meeting of shareholders in 2026 to review a proposal concerning the gratuitous transfer of relevant headquarters asset groups to wholly owned subsidiaries. A total of 1,437 shareholders and proxies attended, representing 1,452,227,838 voting shares, or 54.4804%. The proposal received 1,451,414,819 votes in favor, representing an approval rate of 99.9440%; the approval rate among shareholders holding less than 5% was 99.6490%. No proposal was rejected. The company’s legal counsel concluded that the convening, proceedings and voting procedures were lawful and valid. The matter still requires subsequent approval or review by the State Administration of Science, Technology and Industry for National Defense, the company’s state-owned-asset supervisory authority and the employee representative congress. The actual scope and completion time of the transfer remain uncertain.

4.2 Headquarters Aero-Engine Manufacturing Assets to Be Transferred Gratuitously to Xi’an Hongqi

On August 25, 2026, the company disclosed a plan to transfer, gratuitously, the headquarters’ aero-engine manufacturing-related assets, liabilities, businesses and personnel to its wholly owned subsidiary Xi’an Hongqi Aero Engine Co., Ltd. The book value of the assets proposed for transfer was approximately RMB 26.3856 billion, and the book value of liabilities was approximately RMB 15.4832 billion. Current assets were approximately RMB 19.5058 billion and non-current assets approximately RMB 6.8798 billion, mainly comprising accounts receivable of approximately RMB 11.4851 billion, inventory of approximately RMB 5.3365 billion and fixed assets of approximately RMB 4.8990 billion. Of the liabilities proposed for transfer, current liabilities were approximately RMB 16.7592 billion and non-current liabilities were negative RMB 1.2760 billion, mainly comprising accounts payable of approximately RMB 6.6671 billion, short-term borrowings of approximately RMB 4.8083 billion and notes payable of approximately RMB 3.1389 billion. The transfer base date was July 31, 2025, with the final figures subject to actual implementation. Upon completion, Xi’an Hongqi’s registered capital will increase from RMB 1 million to RMB 800.1 million, while the company will continue to hold 100% of its equity. The company stated that the transaction constitutes internal resource integration, does not constitute a material asset restructuring or related-party transaction, will not change the scope of consolidated financial statements and is not expected to have a material adverse impact on financial condition or operating results. The matter still requires approval from the State Administration of Science, Technology and Industry for National Defense and the company’s state-owned-asset supervisory authority. The personnel-transfer plan also requires approval by the employee representative congress.

4.3 First-Half 2026 Earnings Guidance Fulfilled, with Revenue and Profit Growing Year on Year

On July 15, 2026, the company estimated first-half net profit attributable to owners of the parent of RMB 140–155 million, representing year-on-year growth of 52.54%–68.89%; non-GAAP net profit was expected at RMB 195–210 million, up 407.62%–446.67% year on year. The formal interim report disclosed on August 25, 2026 showed operating revenue of RMB 20.755 billion, up 47.21% year on year; net profit attributable to shareholders of the listed company of RMB 146.2 million, up 59.32%; non-GAAP net profit attributable to shareholders of the listed company of RMB 201.6 million, up 424.91%; and basic EPS of RMB 0.05, up 66.67%. Net cash flow from operating activities was negative RMB 7.461 billion, compared with negative RMB 9.168 billion in the same period of the prior year. The formal interim-report figures fell within the guidance range, indicating that the guidance was broadly fulfilled. The company attributed the earnings growth mainly to the orderly progress of production and delivery tasks and revenue growth.

4.4 General Manager Shen Peng Resigned and Became Vice Chairman

The company disclosed on July 31, 2026 that director and general manager Shen Peng resigned as general manager on July 28, 2026 due to work reassignment, while continuing to serve as a director. On July 30, 2026, the board elected Shen Peng as vice chairman, with a term lasting until the expiration of the current board’s term. The announcement did not disclose any operating risks, regulatory penalties or personal reasons associated with the change. Existing announcements do not indicate that Shen Peng has fully exited the company’s management system. The succession arrangement for the general-manager position and the division of responsibilities remain subject to further announcements.

4.5 No Significant Change in the Controlling Shareholder’s Stake; Ranking of Top Ten Shareholders Adjusted

As of June 30, 2026, Aero Engine Corporation of China held 1,220,558,027 shares, representing 45.79%, and was the controlling shareholder. AECC Fund Management Co., Ltd. held 3.68%, HKSCC Nominees Limited held 2.53%, Guizhou Liyang Aero-Engine Co., Ltd. held 1.46% and Guizhou Wujiang Energy Investment Co., Ltd. held 1.17%. The interim report disclosed that none of the shares held by the top ten shareholders were pledged, marked or frozen. According to shareholder data from THS, the top ten shareholders collectively held approximately 1.554 billion shares, or approximately 58.29% of total shares, an increase of approximately 23.4163 million shares from March 31, 2026. HKSCC Nominees Limited recorded a relatively noticeable increase in holdings, the National Military-Civilian Integration Industry Investment Fund reduced its holdings, and the Abu Dhabi Investment Authority newly entered the top ten shareholders. These ranking changes are based on shareholder-register statistics and do not constitute evidence of a specific purchase or sale disclosed by the company. As of now, no announcement has been identified indicating a reduction, pledge or change of control by the controlling shareholder.

4.6 No New Buyback, Material Regulatory Inquiry or Penalty Identified as of September 12

As of September 12, 2026, searches concerning share buybacks, increases or reductions by the controlling shareholder, regulatory inquiries, regulatory penalties and mergers and acquisitions did not identify any new share-buyback announcement, controlling-shareholder shareholding-plan announcement, material regulatory inquiry letter or regulatory-penalty announcement by the company in September 2026. Relevant search results on the Shanghai Stock Exchange regulatory inquiry page showed “No data available.” However, due to search conditions and page-update delays, this cannot absolutely exclude matters not yet recorded in the database. The company’s August 25 disclosures, including the continuing risk assessment report on China Aerospace Engine Group Finance Co., Ltd., the guarantee-progress announcement and the interim report, constitute routine disclosures concerning related-party funds and guarantee risks and do not amount to regulatory penalties or inquiries.

4.7 Interim Results Presentation Scheduled for September 21

The company plans to hold a 2026 interim results presentation through the Shanghai Stock Exchange Roadshow Center from 11:00 to 12:00 on September 21, 2026. Investors may submit questions in advance from September 14 through 16:00 on September 18, 2026. As of September 12, 2026, the presentation had not yet taken place. Key areas to monitor include the sustainability of first-half revenue and profit growth, the causes of substantial operating-cash-flow outflows and planned improvements, the actual completion of the gratuitous headquarters asset transfer, the operating arrangements after Xi’an Hongqi assumes the relevant businesses and personnel, and the subsequent general-manager appointment and management responsibilities.

5. Share-Price Performance and Technical Analysis

5.1 Price Overview

5.2 Technical Indicators

As of September 11, 2026, AECC Aero-Engine Power had experienced a short-term rebound since August 19. The closing price was above MA5, MA10 and MA20, the short-term moving averages were in a bullish configuration and MACD was above the zero axis, indicating an overall strong technical pattern. However, the share price was close to the Bollinger upper band and the resistance zone around RMB 42, RSI14 was near 70, trading volume had gradually declined after the volume-backed rise on September 8, and major-player funds recorded consecutive net outflows from September 9 to September 11. In the short term, the stock is in a phase of high-level turnover and divergence between bulls and bears. Attention should be paid to the effectiveness of any breakout above the RMB 42.00–42.45 resistance zone and whether the RMB 40.00–40.60 support zone can attract buying.

5.3 Short-Term Outlook (Next Week; Scenario Analysis for Reference Only)

⚠️ Risk warning: The following is a subjective scenario analysis based on closing data as of September 11, 2026. It does not constitute investment advice or a single-point price forecast.

① Key Technical Levels

② Scenarios for the Next Week (Subjective Weights, Not Statistical Probabilities)

• Range-bound consolidation (relatively high weight, approximately 60%; this is a subjective heuristic judgment based on the current technical pattern, trading volume and fund flows, not a statistical probability): The price range would be approximately RMB 40.00–42.40. Conditions include the share price holding above RMB 40 but failing to decisively break RMB 42.36–42.45, turnover falling to approximately RMB 1.4–1.8 billion, and major-player fund inflows becoming modestly positive or net outflows narrowing. If RSI14 fluctuates around 65–70 and the MACD histogram gradually narrows without falling below the zero axis, the pattern would be more consistent with high-level gain consolidation.
• Weak decline (medium weight; this is a subjective heuristic judgment, not a statistical probability): The price range would be approximately RMB 38.60–40.00. Triggers include a volume-backed break below RMB 40, continued consecutive net outflows from major-player funds or simultaneous weakness in the military-industry sector. A further break below the RMB 38.60–39.20 strong-support zone could lead to a retreat toward MA20 at approximately RMB 38.37 or even the area near RMB 36. In this scenario, RSI14 could retreat toward the 50–60 range, while the positive MACD histogram could shorten or form a death cross.
• Stronger rebound (low weight; this is a subjective heuristic judgment, not a statistical probability): The price range would be approximately RMB 42.40–44.00. Triggers include broad strength in the military-industry sector, daily turnover rising above RMB 2.0 billion, a decisive closing breakout above RMB 42.36–42.45 and a clear return of net inflows from major-player funds. An intraday breakout followed by a close back below RMB 42 would be more likely to represent a failed rally than a valid breakout.

③ Capital and Liquidity Background

As of September 11, 2026, the turnover rate was 1.32% and turnover value approximately RMB 1.453 billion. Turnover rates over the five most recent trading days were approximately 1.32%, 1.67%, 2.12%, 1.82% and 1.35%, averaging approximately 1.66%; turnover values were broadly RMB 1.45–2.30 billion. Turnover value was approximately RMB 2.304 billion on September 8 and then gradually declined. Overall daily turnover was in the tens-of-hundreds-of-millions range, indicating good liquidity and generally no extreme liquidity shortage typical of small-cap stocks. Shareholder data are as of June 30, 2026, with an announcement date of August 25, approximately two and a half months before the current market conditions, and may not fully reflect the latest ownership changes in September 2026. The top ten tradable shareholders collectively held approximately 1.554 billion shares, or approximately 58.30% of tradable shares. The largest shareholder, Aero Engine Corporation of China, held approximately 45.79%. The top ten shareholders also included AECC Fund Management Co., Ltd., HKSCC Nominees Limited, the National Military-Civilian Integration Industry Investment Fund, the Abu Dhabi Investment Authority, New China Life Insurance products and other industrial, state-owned and institutional investors. A THS page showed that institutional holdings accounted for approximately 63.76% of the free float as of March 31, 2026, but “other institutions” included a substantial proportion of industrial and state-owned institutions and cannot simply be equated with active public-fund capital. The number of shareholders was approximately 130,438 as of June 30, 2026, an increase of 9,332 from March 31, 2026. Average holdings per shareholder decreased from 22,006 shares to approximately 20,432 shares, indicating a marginal weakening in shareholder concentration during the second quarter, with some holdings potentially dispersing among a larger number of small and medium-sized investors. These data are subject to a lag and actual ownership may already have changed. Combined with declining volume after the volume-backed rise and consecutive net outflows from major-player funds, the marginal willingness of short-term chasing capital has weakened somewhat, although current trading scale remains sufficient for normal trading.

If daily turnover subsequently remains above RMB 2.0 billion and the share price simultaneously closes above RMB 42.36–42.45, this could be regarded as a signal of renewed capital strength and volume-price confirmation of trend continuation. If turnover remains below RMB 1.5 billion and the share price falls below RMB 40, weakening short-term support should be monitored.

④ Key Points to Monitor (Observation Framework Only, Not Trading Instructions)

• Observe whether the share price finds support in the RMB 40.00–40.60 area and whether a break below RMB 40 is accompanied by higher turnover; this is an observation framework, not a trading instruction.
• Observe whether the RMB 42.00–42.45 resistance zone can be decisively broken with daily turnover above RMB 2.0 billion; this is an observation framework, not a trading instruction.
• Observe whether major-player fund outflows end, particularly whether super-large and large orders turn back to net inflows; this is an observation framework, not a trading instruction.
• Observe whether RSI14 re-enters the zone above 70 and whether the MACD histogram continues to expand; this is an observation framework, not a trading instruction.

The above scenario analysis is based on closing data as of September 11, 2026 and calculations using historical prices and technical indicators. Short-term share prices may also be affected by news, capital flows, broader market conditions and other factors. Technical indicators themselves have lagging characteristics and limitations. This does not guarantee future performance or constitute a buy or sell recommendation. Investors should make independent judgments based on the latest market information and bear investment risks themselves.

6. Industry Landscape and Competitor Analysis

6.1 Industry Conditions

Aero-engines are a strategic industry characterized by high technological barriers, substantial capital requirements, long R&D cycles and stringent safety-certification constraints. Materials, design, manufacturing, testing, control systems and maintenance services require extensive coordination. Military aero-engines have strong national-strategic attributes, and competition does not operate entirely according to the mechanisms of ordinary market-oriented manufacturing. Civil aero-engines face high requirements for airworthiness, reliability, long-term service and global supply-chain certification. The global commercial aero-engine market has long been dominated by a small number of international manufacturers, including GE Aerospace, Safran, Rolls-Royce and Pratt & Whitney. The domestic market is centered on the AECC system, forming a specialized division of labor across complete engines, control systems, components, advanced materials and maintenance support.

6.2 Competitive Landscape

• The industry is supported by aviation powers, the low-altitude economy, energy security, green and low-carbon development and domestic substitution.
• The industry also faces challenges related to product maturity, supply-chain delivery, R&D spending and capital occupation.
• AECC Aero-Engine Power’s main advantage lies in complete-engine and system-level capabilities rather than a single component or material.
• The company has business exposure to military aircraft, civil aircraft, general aviation, gas turbines and international subcontracting, and relies on Liming Company, Southern Company and Liyang Power to form manufacturing bases across different regions and product areas.
• In 2025, the company and its subsidiaries had 9,888 R&D employees, accounting for 32.50% of total employees. Total R&D investment was RMB 885 million, accounting for 1.91% of operating revenue. During the year, the company applied for 784 patents, including 773 invention patents, and obtained 527 granted patents, including 526 invention patents.
• In 2026, the company plans fixed-asset investment of approximately RMB 2.959 billion, including RMB 739 million at headquarters, RMB 1.205 billion at Liming Company, RMB 221 million at Southern Company and RMB 794 million at Liyang Power. The investment plan indicates continued investment in R&D and production-support conditions, equipment upgrades and capacity development, but cannot be directly converted into incremental engine-unit production capacity.
• In 2025, production of aero-engines and derivative products was RMB 41.489 billion, sales were RMB 39.783 billion and inventory was RMB 4.603 billion, all presented on a value basis and not directly equivalent to actual engine units or nominal production capacity.

6.3 Major Competitors

AECC Aero-Engine Power, AECC Aero-Engine Control and AECC Aviation Technology are all related to the AECC industrial chain, but AECC Aero-Engine Power is more focused on complete engines, final assembly and full-lifecycle support; AECC Aero-Engine Control focuses on control systems; and AECC Aviation Technology focuses on engine components and precision manufacturing. Yilong Technology, Parker New Materials and Tunan are mainly positioned in upstream or supporting segments such as core castings, special-alloy forgings, superalloys and hot-end components. They are comparable companies within the industry chain but not direct complete-engine competitors in the strict sense. There are relatively few A-share listed companies directly engaged in the development, final assembly and maintenance of military aero-engine complete units in China.

7. Risk Factors

• Delivery and order-realization risk: Revenue from aero-engines and derivative products declined 3.37% year on year in 2025. The company attributed this to changes in customer demand and deliveries falling short of expectations. Whether first-half 2026 revenue growth can continue depends on the continuity of production and delivery tasks. Actual orders, models and capacity are subject to military confidentiality requirements, limiting external verifiability.
• Gross-margin and new-product maturity risk: Core-business gross margin declined from 10.16% in 2022 to 8.50% in 2025. Consolidated gross margin was approximately 9.0% in the first half of 2026, down approximately 1.9 percentage points year on year. If improvements in new-model maturity, yield rates, process efficiency or fixed-cost dilution fall short of expectations, revenue growth may not translate into comparable profit growth.
• Accounts receivable, inventory and cash-flow risk: Accounts receivable were RMB 44.448 billion at the end of 2025; accounts receivable and notes receivable were approximately RMB 53.25 billion and inventory approximately RMB 37.83 billion at the end of the first half of 2026; net cash flow from operating activities was negative RMB 7.461 billion. Insufficient improvement in collections, inventory consumption or supply-chain settlement could continue to tie up funds and suppress earnings quality.
• Customer-concentration risk: The top five customers accounted for 90.78% of annual sales in 2025. Military products and domestic complete-aircraft supporting businesses generally adopt designated-model, fixed-pricing and planned-procurement mechanisms, limiting the company’s complete free-pricing power in the short term. Changes in major-customer demand, procurement plans or delivery schedules could significantly affect revenue recognition.
• Supply-chain concentration and cost risk: The top five suppliers accounted for 55.05% of total procurement in 2025, while related-party procurement accounted for 30.46%. The company does not have complete pricing power over superalloys, titanium alloys, special steels and key supporting resources. Changes in material delivery, supplier qualifications, quality stability or manufacturing costs could affect deliveries and gross margin.
• Asset-transfer execution risk: Relevant headquarters manufacturing assets are proposed to be transferred to Xi’an Hongqi, involving assets with a book value of approximately RMB 26.3856 billion and liabilities of approximately RMB 15.4832 billion. Although the proposal was approved by shareholders at a high rate, it still requires relevant approvals and review by the employee representative congress. The actual scope, completion date and post-transfer business and personnel arrangements remain uncertain.
• Valuation and earnings-realization risk: Based on the data provided, static PE is approximately 172x and TTM PE approximately 159x; institutional forecast PE for 2026–2028 is approximately 180x, 138x and 109x, respectively. The valuation is highly dependent on future delivery growth, gross-margin recovery and the realization of new businesses. If profit recovery falls below forecasts, valuation volatility could increase.
• Short-term market-volatility risk: As of September 11, 2026, the share price was close to the RMB 42.00–42.45 resistance zone, RSI14 was near 70, trading volume had declined after the volume-backed rise, and major-player funds recorded consecutive net outflows from September 9 to September 11. If the resistance zone cannot be decisively broken or RMB 40 is breached, short-term high-level volatility and pullback pressure could increase.

8. Conclusion and Outlook

The company’s medium- and long-term growth drivers mainly include its complete-engine and integrated-support capabilities, demand for military aero-engines, the transition of new models into stable mass production, improvements in product maturity and yield rates, better delivery efficiency and fixed-cost dilution. The industrialization and increasing revenue contribution of civil aero-engines, general-aviation power, gas turbines, export subcontracting and maintenance support could also broaden the business mix, although the scale of these businesses will continue to depend on product maturity, airworthiness certification, supporting aircraft models and mass-production progress.

First-half 2026 results achieved relatively rapid growth. The company’s full-year operating targets are operating revenue of RMB 49.949 billion and net profit attributable to the parent of RMB 524 million. Institutional average forecasts for 2027 and 2028 net profit attributable to the parent are RMB 791 million and RMB 1.000 billion, respectively, reflecting market expectations for subsequent profit recovery. However, consolidated gross margin was approximately 9.0% in the first half of 2026 and declined year on year, while operating cash flow remained substantially negative. The realization of earnings forecasts still depends on delivery continuity, gross-margin recovery and working-capital improvement.

The headquarters’ manufacturing-related assets are proposed to be transferred gratuitously to wholly owned subsidiary Xi’an Hongqi. The proposal was approved by shareholders at a high rate, but still requires subsequent procedures involving the State Administration of Science, Technology and Industry for National Defense, the state-owned-asset supervisory authority and the employee representative congress. The actual scope and completion date of the transfer remain uncertain. Going forward, attention should focus on the implementation of the asset transfer, management succession arrangements, the sustainability of revenue growth, whether gross-margin decline stabilizes, and changes in accounts receivable, inventory and operating cash flow. From a technical perspective, the volume-price performance around the RMB 42.00–42.45 resistance zone and RMB 40.00–40.60 support zone should be monitored.

Data Sources

• AECC Aero-Engine Power Co., Ltd. 2025 Annual Report
• AECC Aero-Engine Power (600893)_Company Announcements_AECC Aero-Engine Power: 2022 Annual Report_Sina Finance_Sina.com
• AECC Aero-Engine Control Co., Ltd. 2025 Annual Report
• AECC Aviation Technology Co., Ltd. 2025 Annual Report
• Company Announcements_Yilong Technology: 2025 Annual Report_Sina Finance_Sina.com
• Parker New Materials (605123)_Company Announcements_Parker New Materials: 2025 Annual Report_Sina Finance_Sina.com
• Company Announcements_Tunan: 2025 Annual Report Summary_Sina Finance_Sina.com
• AECC Aero-Engine Power (600893)_Company Announcements_AECC Aero-Engine Power: 2026 Interim Report Summary_Sina Finance_Sina.com
• AECC Aero-Engine Power (600893)_Company Announcements_AECC Aero-Engine Power: 2026 Interim Report_Sina Finance_Sina.com
• AECC Aero-Engine Power (600893) 2026 Interim Results Review: First-Half Revenue Exceeded RMB 20 Billion for the First Time; “Two-Engine” Businesses Expected to Support Stabilization and Recovery_Sina Finance_Sina.com
• AECC Aero-Engine Power (600893) Earnings Forecast_F10_THStock Financial Services
• AECC Aero-Engine Power (600893) Earnings Forecast_F10_THStock Financial Services
• Earnings Forecast
• Earnings Forecast
• Guosen Securities—AECC Aero-Engine Power (600893): “Aero-Derived Gas Turbines + Large Aircraft + Military Aftermarket” Three-Pronged Growth Drivers Ready to Unleash—260414.pdf
• AECC Aero-Engine Power (600893) Stock Forecast and Analyst Ratings—Futu NiuNiu
• AECC Aero-Engine Power (sh600893) Research Reports | Research Ratings | Institutional Reports_Sina Finance_Sina.com
• AECC Aero-Engine Power (600893) Historical Stock Data: Historical Quotes, Prices and Charts_Investing.com
• AECC Aero-Engine Power (600893) PE | Valuation | Fundamentals—Lixinger
• AECC Aero-Engine Power (600893)_Company Announcements_AECC Aero-Engine Power: Resolution Announcement of the Third Extraordinary General Meeting of Shareholders in 2026_Sina Finance_Sina.com
• AECC Aero-Engine Power (600893)_Company Announcements_AECC Aero-Engine Power: Announcement on the Gratuitous Transfer of Relevant Headquarters Asset Groups to Wholly Owned Subsidiaries_Sina Finance_Sina.com
• AECC Aero-Engine Power (600893)_Company Announcements_AECC Aero-Engine Power: 2026 Interim Earnings Forecast_Sina Finance_Sina.com
• AECC Aero-Engine Power (600893)_Company Announcements_AECC Aero-Engine Power: 2026 Interim Report Summary_Sina Finance_Sina.com
• Securities Code: 600893　　Securities Abbreviation: AECC Aero-Engine Power　　Announcement No.: 2026-037
• AECC Aero-Engine Power (600893) Shareholder Research_F10_THStock Financial Services
• Regulatory Inquiries | Shanghai Stock Exchange
• AECC Aero-Engine Power Co., Ltd. 2026 Interim Report Summary | Shanghai Securities Journal
• AECC Aero-Engine Power (600893)_Company Announcements_AECC Aero-Engine Power: Announcement on Holding the 2026 Interim Results Presentation_Sina Finance_Sina.com
• AECC Aero-Engine Power (600893) - Company Profile - Stock Market Center - Sohu Securities
• AECC Aero-Engine Power (600893) Historical Stock Data: Historical Quotes, Prices and Charts_Investing.com
• AECC Aero-Engine Power Technical Daily Report Archive (600893.SS) · Read Military
• AECC Aero-Engine Power (600893)_Capital Flows_Securities Star
• AECC Aero-Engine Power (600893) - Tradable Shareholders - Stock Market Center - Sohu Securities

This report was automatically researched, compiled and generated by AI based on publicly available information. Information is current as of the September 11, 2026 close and may differ due to timing. Specific data should be based on the company’s official announcements and authoritative data terminals. This report is for information and research reference only and does not constitute investment advice of any kind. Investors should make independent judgments and bear investment risks themselves.