This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Boeing, Embraer May Have No Reason to Fear China’s Weak Rival AVIC

BEIJING (TheStreet) -- China's state-run aviation conglomerate posted a weak, first-half financial report this week that's got stock analysts buzzing about potential delays for the Chinese jetliners designed to rival Boeing (BA - Get Report) , Airbus (EADSF) , Bombardier (BDRBF) and Embraer (ERJ) aircraft.

Manufacturers under the Aviation Industry Corporation of China umbrella have fallen behind on military as well as commercial projects, according to a Friday report by Shanghai Securities, whose analysts crunched the 2014 first half figures released Tuesday. AVIC stock trades in Hong Kong.

AVIC said it lost 85 million yuan in the period, as revenues fell 10.7% from 7.03 billion yuan in the same period a year earlier. Revenues reached only 36% of the government's full-year target, the company said, adding that it expects sales to jump in the second half on higher customer deliveries.

The securities firm report blamed "financial bottlenecks" for the company's performance and gave an "underweight" stock investment recommendation.

AVIC's key commercial projects include two in the pipeline at its affiliate Commercial Aircraft Corporation of China or Comac: the under-development Comac C919, billed as a future challenger to the Boeing 737 and Airbus A320, and the Comac ARJ21 regional jetliner, China's reply to aircraft built by Bombardier and Embraer.

A slow pace of development for the C919 has fueled "big uncertainty" over whether Comac can hit its current October 2015, target for the jet's first test flight, the securities firm said. Missing that target would throw off plans to deliver the first customer model in 2018.

The company is not famous for meeting schedules. For example, Comac plans to deliver its first ARJ21 by the end of this year, nearly eight years later than originally planned for the jet's commercial roll-out and 13 years after the jet's development began. The client, China's Chengdu Airlines, is buying two jetliners.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BA $132.61 -1.00%
AAPL $95.03 1.50%
FB $117.86 -0.60%
GOOG $694.49 -0.53%
TSLA $235.35 -2.70%


Chart of I:DJI
DOW 17,733.58 -157.58 -0.88%
S&P 500 2,059.67 -21.76 -1.05%
NASDAQ 4,762.1030 -55.4910 -1.15%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs