| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 30.77 | -4 |
| Intrinsic value (DCF) | 6.81 | -79 |
| Graham-Dodd Method | 4.56 | -86 |
| Graham Formula | 0.47 | -99 |
Chengdu ALD Aviation Manufacturing Corporation (300696.SZ) is a specialized aerospace components manufacturer headquartered in Chengdu, China, serving the rapidly expanding Chinese aviation industry. Founded in 2004, the company focuses on the research, development, and production of critical aircraft parts, aero-engine components, and large structural parts for aerospace applications. ALD's comprehensive product portfolio includes special process products, assembly parts like bushings, bearings, and splines, as well as essential ground support equipment such as mounting vehicles, electromechanical simulators, and jacks. Operating within China's strategic aerospace and defense sector, the company benefits from the country's growing domestic aviation market and government support for aerospace industrialization. As China continues to develop its commercial aviation capabilities through programs like the COMAC C919 and expands its military aerospace footprint, Chengdu ALD is positioned as a key domestic supplier in this high-technology industrial segment. The company's location in Chengdu, a major aerospace hub, provides strategic advantages for collaboration with major Chinese aviation manufacturers and research institutions.
Chengdu ALD presents a speculative investment opportunity tied to China's aerospace industrialization ambitions, though current financial metrics indicate significant challenges. The company reported a net loss of CNY 24.9 million for the period despite generating CNY 301 million in revenue, reflecting operational inefficiencies or competitive pressures. While the company maintains a solid cash position of CNY 389.6 million against modest debt of CNY 32.1 million, negative operating cash flow of CNY 43.8 million and substantial capital expenditures of CNY 98.8 million raise concerns about cash burn. The beta of 0.89 suggests moderate volatility relative to the broader market. The primary investment thesis revolves around exposure to China's growing aerospace sector, particularly through domestic aircraft programs, but investors should carefully monitor the company's path to profitability and ability to secure sustainable contracts in an increasingly competitive supplier landscape.
Chengdu ALD operates in a highly specialized segment of China's aerospace manufacturing ecosystem, competing against both domestic suppliers and international joint ventures. The company's competitive positioning is defined by its focus on aircraft parts, aero-engine components, and large structural parts—critical areas where China seeks to reduce foreign dependency. ALD's strengths include its established presence in Chengdu, a major aerospace cluster, and its comprehensive capabilities spanning research, development, and manufacturing. However, the company faces intense competition from larger state-owned enterprises like AVIC subsidiaries that dominate the Chinese aerospace supply chain and benefit from preferential access to major programs. International competitors with advanced technological capabilities also pose challenges, particularly in high-precision components. ALD's competitive advantage appears limited to its niche specialization and regional presence rather than scale or technological leadership. The company's negative profitability and substantial capital expenditures suggest it may be struggling to achieve economies of scale or maintain competitive pricing. In China's evolving aerospace market, ALD's long-term viability will depend on its ability to secure stable contracts from major OEMs like COMAC and AVIC, while navigating the technological upgrading requirements and cost pressures characteristic of the global aerospace supply chain. The company's modest market capitalization of approximately CNY 7.65 billion indicates it remains a relatively small player in a sector dominated by much larger enterprises.