China's military regime on the
generation gap with the West need to promote enterprise
development
Core Tip: China
Aviation Industry Group Corporation Lin Zuo Ming said, the aircraft
industry restructuring objective has never
changed. Present in the
system, the Chinese military enterprises with the gap between the
West is "generation gap", we are not allowed to have this
"generation gap." As a military
enterprise, we must accelerate the construction of a modern
enterprise system, the only way to exchange blows with the master
of the West.
Data Figure: China Helicopter
Plant.
Data for: helicopter in
production.
China Aviation Industry Group Corporation Lin Zuo Ming in the
"China Securities News" interview with reporters, said the
reorganization is slow mainly because the policy level, to
accelerate the speed to be the reorganization of assets policy,
"ice"; driven by the capital stock of the modern
military-industrial enterprise system, is in the direction
of the aircraft industry has never
wavered. The
aircraft industry through a series of system design, enhanced
communication with relevant departments, and strive to achieve in
the aircraft industry, "two finance three new, five-oriented,
trillion," the stated objectives.
"150,2500,5000."
This is as Lin Zuo Ming, general manager of China Aviation Industry
Corporation to produce a beautiful 3 years
respondents. Since the founding in 2009,
the aircraft industry from the capital market to raise 150 billion
yuan. Latest data
show that as of the end of 2011, the Group's annual sales income
reached 250 billion yuan, total assets of more than 500 billion
yuan. Currently, more than 70%
of the Group's subsidiary has launched a core business asset
securitization process.
In accordance with the idea of Lin Zuo Ming, with group assets of
the progressive realization of the strategic reorganization of the
future headquarters of the aircraft industry will be mainly
responsible strategic control and financial holding role, complete
the section's governance of listed
companies. Group of
high-quality industrial assets, will be the right time, into
different categories for each section of the listing platform to
go, in order to achieve the main business subsidiary of the overall
market.
The future of the aircraft industry's Institute for a large number
of asset classes, will be the next re-focus; the future of our
financial sector, will become an important foundation of the main
business aviation, a subsidiary of overseas M & A depends on
the speed the process of asset securitization.
Policy to speed up the reorganization of
assets to be "ice-breaking"
China Securities Journal: In accordance with the established goals
in the aircraft industry in 2011 to achieve 80% subsidiary of the
main business and related assets into the listed company, a
subsidiary of the basic realization of the overall market, as of
now, how to achieve this goal?
Lin Zuo Ming: the reorganization of
assets in the aviation industry based upon the stated objectives in
the promotion. Start from the work process
perspective, this goal has been basically
achieved. But the results,
by objective factors, the current rate of asset securitization
subsidiaries reached only 55% failed to meet established
goals. Many
reasons, the first volume of assets involved in all aspects;
Secondly, the aircraft industry's restructuring of the sector, need
to go through a number of departments for examination and
approval.
Nevertheless, the aircraft industry
restructuring goals have never changed. Present in the
system, the Chinese military enterprises with the gap between the
West is "generation gap", we are not allowed to have this
"generation gap." As a military
enterprise, we must accelerate the construction of a modern
enterprise system, the only way to exchange blows with the master
of the West.
China Securities
Journal: In accordance with the current development growth in 2020
can be achieved in the aircraft industry, "trillion"
target? Some
people think that large-scale restructuring in the height of the
aircraft industry has been in the past, the future will enter into
a difficult period of integration and financial development, how to
treat this problem?
Lin Zuo Ming: We never will,
"trillion" as hard targets. The reason that
"trillion" target, I mainly want this group to the world-class
Forced military enterprise line.
In 2011, China Aviation
Industry sales income of 2,500 yuan, profit of 120 billion
yuan.Planned
2015 sales income of 50 billion yuan, there are still four years,
so the "second five" sales target to achieve 500 billion yuan will
be a challenge. To achieve this
goal, the next four years to operate air services in new markets,
and to work on developing civilian products.
On the
restructuring, ST and ST Aerospace Changhe restructuring in the
technical operational level is very complex, but we
did. Therefore,
the reorganization of the difficulties are not at the technical
level, but mainly at the policy level, the relevant departments of
the military enterprises listed on the current understanding, there
are still different views.
China Securities
Journal: In November last year, denied a defense assets Hongdu
Aviation news listing platform, contrary to many investors
expected. Listed in the group as a whole
process, how to face the challenges of military assets
listed? Reorganization of military assets in the
aviation industry the idea of that?
Lin Zuo Ming: defense assets are indeed
very complex. From
an international point of view the major defense companies,
Lockheed Martin and EADS (European Aeronautic Defense and Space
Group) are listed companies, more than 50% of Boeing defense
business, it is a listed company. Military defense
sector in the aviation industry is relatively concentrated, but we
never will Hongdu Aviation business listing platform as a defense
plan.
China Securities Journal: But the
company did before the announcement seems to suggest
relevant.
Lin
Zuo Ming: The Paris Air Show, we learned that more than 70% of
Dassault's revenue comes from business jets, fighter income is only
about 20%, less than 10% from the software
business. Future
defense company in the aviation industry but also the development
of business jets, said at the time the Hongdu Aviation Listed
platform as a defense, but also refers to the civil part of the
business market, we never thought of it as a military defense
business listing platform.
Integration
of military and civilian defense in the aircraft industry has
always been the company's guiding ideology, on Hongdu Aviation,
certainly after the first consideration is the civil assets of the
business can be listed.
Reorganization of assets will become the
next focus of Institute
China Securities News:
aircraft industry in a number of business segments, which present
the highest degree of asset securitization
plate? What the future will focus on promoting
the reorganization of assets plate?
Lin Zuo Ming:
Basically, all the current avionics sector assets are injected into
the enterprise in the aircraft electronics (formerly ST
Changhe). AVIC also the overall market in
advance in accordance with established goals.
Xi'an Aircraft
International restructuring has been restarted, with the exception
Institute assets, the assets of the aircraft in the aircraft
industry have been injected. December 30,
2011 the Commission has reviewed the conditions of major assets by
the Xi'an Aircraft International projects will be completed the
first half of 2012 reorganization.
Overall, all the plates in the aircraft industry in promoting the
overall market, individual blocks may be related to the main
business aviation does not matter, for example in aircraft
construction, its does not have any listed companies, companies
like this, we will consider a separate IPO.
China Securities Journal: helicopter is not in the aircraft
industry's only integrated subsidiary of any assets, Hafei only
listed as a helicopter platform, the integration of assets is
expected to strongly, this group plans?
Lin Zuo Ming:
The Chinese helicopter market potential is very large, as long as
the low-altitude airspace opening up, be the first to enter the
international market is the helicopter.Characteristics of the helicopter is
basically dependent on the localization of post-service
side. So long as the low opening of the
domestic market will be very large.
Hafei
Aviation Industry Co. have established a partnership with the
helicopter company in Tianjin, the current headquarters building
and focus on new projects, the helicopter company in the future
capital of the direction is clear.
China Securities News:
Aviation Precision Machinery is defined as the integration platform
for mechanical and electrical equipment assets, reorganization of
the company when the second start?
Lin Zuo Ming: Aviation
Precision Machinery completion time of the first round of asset
integration is expected in the first half of
2012. The second round of
the Academy's greatest asset is the asset, but the Institute of the
assets into the listed company on the premise that
restructuring. Similar to the Aviation Precision
Machinery Research Institute of the assets is also an
asset.
Financial sector will become the aviation
industry relies on the main
China
Securities Journal: China's aviation industry now has securities,
trust and other financial assets, the Group in this area, what kind
of operation of the idea?
Lin Zuo
Ming: aviation industry must rely on the main financial, EADS, GE
and other large companies have a financial asset backing, in order
to form the whole industry chain
advantages. The future structure of our financial
sector, the consortium will be similar with
Mitsubishi.
Boeing,
Lockheed Martin and other companies top ten investors are Wall
Street's major funds, banks, indicating that the U.S. military
system, the investment managers is relatively
stable. In the U.S., large
financial institutions subject to government regulation, as we
understand the private holding is so
uncontrollable. Unfortunately,
the current domestic financial institutions and not a lot of equity
holding important military plates, large domestic banks and in the
aviation industry more or lending relationships, and shares do not
form close relationships.
China
Securities Journal: Non-aviation sector, there are already Fiyta,,
mid, Rainbow Department Store, the Air real estate and other
companies, the next two years the development of non-aviation
sector thinking that? Some people think that
non-aviation industry, AVIC Spread too big, how to treat this
problem?
Lin Zuo Ming: This is a historical
formation. The
eighties of last century aviation industry for conversion, in turn,
we take two paths: one is with the local cooperation, sent
technical personnel, engaged in rural enterprises; second is to
send an advance team into the Shenzhen Special Economic Zone,
Shenzhen CATIC the company is produced, let
us do it, certainly not like to do business.
Currently,
the, mid, Fiyta, Rainbow Department Store, Shenzhen Nanshan Power
companies such as commercial positioning, management and
operational levels are very high, this is the result of market
competition. These enterprises are
state-owned assets, since it has been doing so well, we must
continue to maintain.
Although the main business of these companies and aviation
irrelevant, but these enterprises have become the main industry in
the aviation industry aviation market economy "home teachers", we
hope that these companies market awareness, can be transferred
through various channels to the main business aviation
group in an effort to improve the aviation
industry's main market participation. Currently, we have been sent
from the aviation industry in the main important cadres to these
companies suspended duties.
Subsidiaries of overseas M & A market
process depends on the speed
China Securities Journal:
M & A action in the aircraft industry abroad frequently, the
Group's cash flow will not cause tension? Future overseas acquisitions in the
aviation industry in terms of thinking is what?
Lin
Zuo Ming: If the Group's subsidiaries listed on the main business
can be successfully achieved through the acquisition of assets of
listed companies, holdings, then the acquisition of funds would not
be a problem. Frankly
speaking, the current acquisition of overseas assets in the
aviation industry, there are two problems: first, the adequacy of M
& A team, we are currently commissioned by Xiamen University
specialized training overseas mergers and acquisitions
professionals; second in the domestic and overseas capital markets
process is smooth, If the capital market is weak, we will
be cautious of mergers and acquisitions.
Overseas
acquisitions in the aviation industry will be the first air; second
is homologous with the aviation industry, including the relative
domestic auto parts manufacturing hollow.Here
I wish to emphasize, welcome private enterprises in the aviation
industry together with overseas acquisitions, mergers and
acquisitions in the future this part of the assets into the listed
company can be, which will provide private enterprises
exit.