AECC Aviation Power Co Ltd

AECC Aviation Power Co Ltd maintains a capital structure characterized by significant leverage and negative cash flow generation. The company reports total assets of 123.07 billion CNY against total liabilities of 82.88 billion CNY, resulting in total equity of 40.19 billion CNY. Long-term debt stands at 29.64 billion CNY, yielding a debt-to-equity ratio of 0.74. Liquidity is assessed as medium risk, supported by a current ratio of 1.16. However, the balance sheet is pressured by negative operating cash flow of -4.42 billion CNY and free cash flow of -1.47 billion CNY, driven by capital expenditures of -3.77 billion CNY. The market capitalization is 23.00 billion CNY, trading at a price-to-book ratio of 0.57, indicating the market values the company below its book value.

Profitability metrics reflect low returns on capital employed. Return on equity is 1.77%, and return on assets is 0.58%. The company generated net income of 634.33 million CNY on revenue of 46.33 billion CNY, resulting in a net margin of approximately 1.37%. Operating income was 962.55 million CNY, while gross profit was 4.01 billion CNY. The valuation multiples are elevated relative to earnings, with a price-to-earnings ratio of 32.27 and an EV/EBITDA of 54.07. These figures suggest that while the company has a large revenue base, its ability to convert sales into net profit is constrained, leading to high multiple valuations despite low absolute returns.

Segment and geographic data are not provided in the available input, preventing a detailed analysis of revenue concentration or regional exposure. The company’s activity is broadly classified as Aerospace & Defense, implying a focus on aviation power systems, but specific product mix or customer concentration details are absent from the current dataset.

Growth trajectory analysis is limited by the absence of historical period data in the input. The latest normalized period shows revenue of 46.33 billion CNY and net income of 634.33 million CNY. Without prior year or quarterly trend data, year-over-year growth rates cannot be calculated. The current financial snapshot indicates a large scale of operations, but the negative free cash flow suggests that current capital intensity may be outpacing cash generation from operations.

Risk assessment highlights medium liquidity risk and low dilution risk. A key flag notes that net cash is negative after subtracting total debt, reinforcing the reliance on external financing or retained earnings to service obligations. The debt-to-equity ratio of 0.74 is moderate but requires monitoring given the negative operating cash flow. Dilution risk is low, as basic and diluted shares outstanding are identical at 2.67 billion shares, indicating no significant options or convertible securities currently impacting share count.

Recent observations include analyst estimates with a mean, median, high, and low price target of 43.55 CNY, significantly above the current market price of 8.63 CNY. The last actual EPS was 0.24 CNY. ESG scores are reported at 45.49 overall, with an environment pillar score of 48.58. These analyst targets suggest a potential undervaluation by the market, although the wide gap between current price and targets warrants caution regarding the assumptions underlying those estimates.

Revenue grew at an 8.0% CAGR over four years, indicating consistent top-line expansion despite recent volatility.

The company maintains a current ratio of 1.84, suggesting adequate short-term liquidity to cover immediate obligations.

Dilution risk is assessed as low, implying limited immediate threat to existing shareholder equity value from issuance.

Long-term debt surged to 26.7 billion CNY in 2025, reflecting aggressive leverage that increases financial risk.

Free cash flow turned deeply negative at -1.47 billion CNY, highlighting severe cash generation challenges.

Interest coverage is negative at -4.79, indicating operating income is insufficient to cover interest expenses.

Return on equity of 1.58% falls well below the cohort median of 8.14%, showing poor capital efficiency.

Revenue ¥46.33B, −3,2% YoY; Operating income −11,1% YoY.

• ▍Revenue ¥46.33B, −3,2% YoY
• ▍Operating income −11,1% YoY
• ▍Net income −26,3% YoY
• ▍Free cash flow −160,8% YoY
• ▍Net margin 1.4%

Revenue ¥47.88B, +9,5% YoY; Operating income −35,7% YoY.

• ▍Revenue ¥47.88B, +9,5% YoY
• ▍Operating income −35,7% YoY
• ▍Net income −39,5% YoY
• ▍Free cash flow +19,1% YoY
• ▍Net margin 1.8%

Revenue ¥43.73B, +17,9% YoY; Operating income +11,2% YoY.

• ▍Revenue ¥43.73B, +17,9% YoY
• ▍Operating income +11,2% YoY
• ▍Net income +12,2% YoY
• ▍Free cash flow −583,5% YoY
• ▍Net margin 3.3%

Revenue ¥37.10B, +8,8% YoY; Operating income +16,0% YoY.

• ▍Revenue ¥37.10B, +8,8% YoY
• ▍Operating income +16,0% YoY
• ▍Net income +6,7% YoY
• ▍Free cash flow +86,7% YoY
• ▍Net margin 3.4%

Revenue ¥34.10B; Operating income ¥1.31B.

• ▍Revenue ¥34.10B
• ▍Operating income ¥1.31B
• ▍Net margin 3.5%