China Post Securities: Maintains "Buy" rating on LUBAIR AVIATION, with a broad outlook for domestic aviation materials

China Postal Securities research report points out that LUBAIR AVIATION will see significant growth in performance in the first half of 2025, with a broad outlook for domestic aviation materials. The company expects to achieve a net profit attributable to shareholders of RMB 65 million to RMB 90 million, a year-on-year increase of 47% to 103%, mainly due to an increase in revenue compared to the previous year, a decrease in share-based payment expenses, and the impact of foreign exchange gains and losses. The company continues to promote the certification, market promotion, and production capacity construction of domestically developed products. In 2024, the Huizhou production base will be fully accepted and put into production, significantly enhancing the company's independent production capacity for domestic aviation materials. As of the end of 2024, the company has approximately 2,400 part numbers that have passed the relevant airworthiness certification from the Civil Aviation Administration of China, which can be equivalently replaced with imported aviation equipment on various domestic Boeing and Airbus passenger aircraft. Some self-developed products have already been included in the approval documents for process materials from Commercial Aircraft Corporation of China. With the acceleration of production and delivery of domestic large aircraft, the demand for aviation materials from the aircraft manufacturing side is expected to grow rapidly. In addition, the company is trying to hedge the impact on its operating conditions by improving product structure, expanding part numbers in unaffected production areas, and exploring new businesses. The increase in costs for some imported products has also provided growth opportunities for the company's localization business. Maintain "Overweight" rating