Hengtian Hailong Plans to Acquire Control of Qunjian Aviation to Establish a Dual-Core Business Growth Model

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(Source: Bao Finance)

Recently, Hengtian Hailong Co., Ltd. announced that the company plans to acquire at least 40% of the equity in Xi’an Qunjian Aerospace Precision Manufacturing Co., Ltd. (hereinafter referred to as “Qunjian Aerospace”) through its wholly owned subsidiary Beijing Dofu Hailong Flight Control Technology Co., Ltd. After the transaction is completed, Hailong Flight Control will become the controlling shareholder of Qunjian Aerospace. This acquisition is an important move by Hengtian Hailong to actively respond to national policies, marking the company’s entry into the aerospace engine sector. In the future, traditional main businesses and new aerospace and aviation businesses will form a dual support structure, bringing new growth opportunities for investors.

Policy support empowers strategic acquisitions to build a dual-business support system

Driven by the strong national strategic planning, the aerospace engine industry is experiencing unprecedented development opportunities.

Hengtian Hailong’s acquisition is a key step in aligning with the national initiative to “vigorously develop new productive forces” and seizing high-quality development opportunities in the aerospace industry. As a listed company deeply engaged in traditional industries, Hengtian Hailong is entering the high-barrier, high-growth field of aerospace components through this acquisition, creating a dual support with its existing core business. This effectively optimizes the company’s business structure and diversifies operational risks. Meanwhile, the platform advantages of the listed company combined with Qunjian Aerospace’s technological reserves and industrial resources will achieve deep complementarity and generate synergistic development effects.

Regarding this cross-industry layout, Hengtian Hailong stated that the transaction is an effort to fully leverage the platform advantages of a listed company, combined with long-term project research and analysis experience, to carry out cross-industry mergers and acquisitions.

High-quality credentials and high barriers to entry become new growth engines

The announcement shows that Qunjian Aerospace was founded in 2005 and is a high-tech enterprise specializing in the precision processing of aerospace engine and gas turbine parts. It is also a “Specialized, Refined, Unique, and Innovative” small and medium-sized enterprise in Shaanxi Province, holding multiple technical and invention patents, building a strong industry barrier and moat.

It is understood that the aerospace parts industry where Qunjian Aerospace operates is in a period of rapid growth, with market size continuously expanding. Institutions like Tianfeng Securities (rights protection) expect the market to surpass 100 billion yuan by 2025, with a compound annual growth rate of over 15%, and industry dividends continuing to be released.

Additionally, the technology accumulation required in aerospace engine manufacturing is extremely strict, with very high entry barriers and strong customer stickiness. Typically, during the R&D and finalization stage, suppliers are pre-selected, and once a customer establishes a partnership, they generally do not change suppliers throughout the product lifecycle. It is reported that Qunjian Aerospace has already undertaken mass production of over 2,000 parts for military aerospace engines, gas turbines, commercial engines from China Aero Engine Corporation, and aerospace rocket engines. Market consensus suggests that after this acquisition, Hengtian Hailong is expected to leverage Qunjian Aerospace’s technological strength and sustainable profitability in precision aerospace manufacturing to create a new engine for performance growth, injecting strong momentum into the company’s future development.

Hengtian Hailong stated that in the future, the company will rely on Qunjian Aerospace’s industrial foundation and technological advantages to further expand into the aerospace field, continuously broaden industrial development space, and help the company achieve new breakthroughs in high-end manufacturing, advancing high-quality development to a new level.