Aeroengine is the most important equipment of aircraft: as a typical technology intensive product, aeroengine needs to work repeatedly in the extreme special environment of high pressure, high temperature, high load and high speed for a long time, which has high requirements for its design, processing and manufacturing capacity. According to different working modes and working principles, aeroengines can be divided into piston aeroengines, gas turbine engines, ramjets, etc. gas turbine engines can be subdivided into turboshafts, turboprops, turbofans and turbojet engines. Among them, turbofan engine is the most widely used engine type and the most core aeroengine at present.
The oligopoly pattern of civil aviation engine market is obvious: in the field of civil aviation engine, only a few countries such as the United States, Britain, France and Russia have formed comprehensive development and industrialization capacity. Ge aviation, Pratt & Whitney (P & W), RORO (RR) and Safran, as well as CFM, IAE and other joint ventures cross operated by these four companies, occupy the aviation engine market of various types of civil airliners.
Only a few countries master the complete development technology of military aircraft engine: at present, only a few countries in the world have the ability to independently develop high-performance military aircraft engine, such as the United States, Russia, Britain, France, China and so on. Ge aviation, Pratt & Whitney, RORO and Safran, the four civil engine giants, still occupy the main market share in the field of military engines and belong to the first echelon of market competition. Domestic military engines have begun to be assembled on the main combat aircraft in active service. With the mass production of main military aircraft models and the improvement of the frequency of practical training exercises, its demand is expected to continue to increase.
China’s aeroengine industry has ushered in a historical development opportunity: “two aircraft special projects” to further improve the independent innovation ability of China’s aeroengine and gas turbine industry, and gradually eliminate the institutional, financial and technical constraints on China’s aeroengine industry development. “Separation of aircraft and engine” breaks the long-standing mode of joint production of aircraft and engine, and separates aircraft manufacturing enterprises from engine manufacturing enterprises, which is conducive to accelerating the industrialization process of domestic aero-engine. The national defense budget has maintained a relatively rapid growth, and the national defense budget structure is inclined to equipment, especially key equipment fields. As a short board restricting the development of China’s aviation industry, the overall industry investment is expected to continue to strengthen, and the industry demand is expected to remain strong.
The main logic of optimistic about aeroengine industry: (1) Localization substitution: previously, China’s military aircraft and initial products of civil aircraft were equipped with foreign engine products; with the development and maturity of engine technology, China has ws10 series and other engines to replace imported products to assemble military aircraft, and domestic civil aircraft engine cj1000 and other models are expected to realize localization matching on C919 and other passenger aircraft models in the future 。 (2) Performance improvement: limited by the engine performance, there is still room for further improvement in the performance of some aircraft. New / next-generation engine products are towed for replacement. (3) Increase in consumption rate: at present, the army emphasizes practical training exercises. The demand for engine consumption rate, maintenance support and replacement has increased the demand for engine quantity, life cycle and reliability.
Investment suggestion: China has formed a complete industrial chain of aero-engines. Under the long-term high-profile atmosphere, it pays attention to the main targets of each link: the upstream and downstream of aero-engines are raw materials, parts, components, subsystems, complete machines and other links, involving titanium alloy, superalloy, composite materials, forging, casting, machining, testing, final assembly and other businesses, With the vigorous development of the national aero-engine industry, China’s industrial chain has tended to be complete. Under the long-term high prospect, major companies in all links of the industrial chain are expected to usher in high-speed growth of revenue and profit. Aecc Aviation Power Co Ltd(600893) is recommended. It is recommended to pay attention to the main targets in the industrial chain such as Avic Heavy Machinery Co.Ltd(600765) , Aecc Aero-Engine Control Co.Ltd(000738) , Wuxi Hyatech Co.Ltd(688510) .
Risk warning: the risk that the speed of technological innovation is lower than expected; The risk of decline of dominant position caused by market competition; Risk of international business affected by Sino US trade friction and covid-19 epidemic.
