AVIC Xi'an Aircraft Industry Group's net profit in 2025 reverses the trend with a 12.49% increase; civil aircraft business becomes a strategic breakthrough point

On the evening of March 30th, AVIC Xi’an Aircraft Industrial Corporation (000768.SZ) released its 2025 annual report. Facing a complex and volatile macroeconomic environment and deep adjustments in the aerospace supply chain, the company achieved an operating revenue of 41.01B yuan for the full year of 2025, a decrease of 5.10% year-on-year; net profit attributable to shareholders reached 1.15B yuan, up 12.49%; and net profit after deducting non-recurring gains and losses was 1.08B yuan, an increase of 16.69%. The company plans to distribute a cash dividend of 1.50 yuan (tax included) for every 10 shares to all shareholders.

AVIC Xi’an Aircraft continues to deepen its “military + civil” dual-engine strategy. The domestic large aircraft civil aircraft component deliveries have increased, and military aircraft business has steadily developed. From financial data, the company’s operational performance in 2025 shows a clear trend of “volume decline, quality improvement.” Although revenue did not meet the previous estimate of 1.15B yuan annual target, the net profit exceeded market expectations—net profit attributable to the parent company of 20B yuan hit a recent high, with a growth rate of 12.49%, standing out in the aerospace manufacturing industry. More notably, the improvement in profit quality is reflected in the faster growth of net profit after deducting non-recurring gains and losses compared to overall net profit, indicating that the company’s core business profitability is strengthening.

“Cradle” of National Strategic Military Aircraft Continues to Benefit from Steady Defense Equipment Demand

In August 2025, CCTV’s “Gongjian” program exposed footage of the heavy cargo parachute drop of the Y-20, and People’s Daily commented: “Our ‘Fat Girl’ is not just a simple transport aircraft for personnel and cargo; we are an important strategic delivery force with sustainable mobility support.” On October 2nd last year, CCTV’s “Zhaowen Tianxia” program on the National Defense Military Channel aired an exclusive interview with AVIC’s First Aircraft Institute, mentioning that the Y-20B large transport aircraft, which officially debuted after the “Ninth Three” grand parade, has been equipped with domestically developed large bypass ratio turbofan engines, significantly improving performance.

AVIC Xi’an Aircraft is committed to developing and manufacturing high-performance military aircraft, mainly including large and medium transport aircraft, bombers, and special aircraft. Large and medium transport aircraft are the backbone of the national strategic delivery system, capable of efficiently completing major tasks such as long-range material delivery, international rescue, and troop deployment; bombers possess powerful strike and deterrence capabilities, serving as vital tools for safeguarding sovereignty and territorial integrity; special aircraft cover functions such as air-based command and refueling, providing comprehensive support for warfare.

Donghai Securities research reports indicate that China’s long-term defense expenditure maintains a steady growth rate of 6%–8%, laying a solid foundation for military aircraft demand. Comparing China’s military aircraft structure with that of the United States, China’s numbers for special aircraft, refueling aircraft, and transport aircraft are only 17.2%, 1.5%, and 31.3% of the US figures, respectively, with fewer strategic support aircraft.

AVIC Xi’an Aircraft is the only domestic core enterprise responsible for the development and delivery of the Y-20 large transport aircraft, the H-6 series bombers, and various special aircraft. The production of military aircraft has consistently achieved high-level deliveries, providing advanced, reliable, and practical aerospace equipment for national defense and the modernization of the armed forces. Since 2024, the company’s Y-20 aircraft have frequently appeared at China Air Show and in countries such as Saudi Arabia, Egypt, and South Africa, demonstrating flight capabilities and showcasing excellent aircraft performance, laying a solid foundation for expanding the product market.

With China’s increasing comprehensive national strength and the urgent need to accelerate military modernization and upgrade aerospace weaponry, AVIC Xi’an Aircraft’s military aircraft business will continue to advance steadily.

Civil Aircraft Business: From “Ballast” to “Growth Pole”

The business structure of AVIC Xi’an Aircraft is undergoing profound changes. Aerospace manufacturing still contributes 98.86% of revenue, but the strategic position of civil aircraft business is rising rapidly. In 2025, the company’s civil aircraft component deliveries increased by 25% compared to 2024, with revenue growth exceeding 20%, and the proportion of civil aviation revenue reaching a new high.

This growth is driven by the industry’s entry into a key phase of large-scale delivery of domestically produced large aircraft. The delivery volume of the C919 fuselage structure achieved “four consecutive increases,” with AVIC Xi’an Aircraft as a core supplier continuing to benefit. During the reporting period, the company delivered 4 sets of components for the Xian MA60 series, 2 sets for the AG600, and significantly accelerated capacity for C919 components.

Donghai Securities research reports point out that global civil aircraft backlog has peaked at 17k units, mainly due to engine supply bottlenecks in aircraft manufacturing, leading to serious delays in new aircraft deliveries. From a market perspective, the Asia-Pacific region leads global growth in civil aviation, with domestic passenger and cargo demand continuing to rise. However, aging fleets have squeezed profits, creating demand for new aircraft in the domestic market. In the future, mass production of the domestically developed C919 may effectively alleviate supply shortages and fleet aging issues.

Currently, AVIC Xi’an Aircraft is the largest fuselage structure supplier for the C919, responsible for 50% of core components such as wings and mid-fuselage, and supplies over 60% of the core sections for the ARJ21. In 2025, the number of civil aircraft components delivered for models like C909 and C919 increased by 25% compared to 2024, with revenue growth exceeding 20%, and the proportion of civil aviation revenue reaching a new high. Additionally, the company has long-term deep cooperation with Boeing and Airbus, mainly producing parts for Boeing B737 MAX and Airbus A320. In 2025, the company’s international subcontracted deliveries totaled 1,231 sets, including 834 for Airbus and 397 for Boeing. The company is benefiting from both domestic substitution and global supply chain integration.

Of particular note is the strategic positioning of the C929 long-range wide-body aircraft. AVIC Xi’an Aircraft has successfully secured key work packages such as the rear fuselage, slats, ailerons, and small wings, officially entering the wide-body aircraft supply chain system. This marks a significant step in the company’s strategic transition from a single-aisle aircraft supplier to the “largest fuselage supplier” for wide-body aircraft.

AVIC Xi’an Aircraft’s international cooperation business remains stable, with 1,231 international subcontracted units delivered in 2025, including 834 for Airbus and 397 for Boeing. The company actively seeks increased cooperation on the A320 series projects following the commissioning of Airbus Tianjin’s second final assembly line, maintaining the international business share at around 4.1%.

Cost Control and R&D Investment in Tandem

AVIC Xi’an Aircraft is the core aircraft listing platform of AVIC Industrial Group. After three major asset reorganizations, it completed core asset swaps in 2020, achieving professional integration of large and medium military and civilian aircraft manufacturing assets, focusing entirely on military aircraft, core fuselage sections for civil aircraft, and aerospace services. From 2020 to 2025, the company’s revenue increased from 17k yuan to 33.48B yuan; post-reorganization, net profit attributable to the parent entered a steady growth phase, reaching 41.01B yuan in 2025, up 12.49%. The company’s net profit margin rebounded from 1.39% in 2022 to 2.81% in 2025, with operating expense ratios steadily declining, indicating high-quality growth.

Behind profit growth is the company’s meticulous cost management. During 2025, total expenses were 1.15B yuan, down 10.04% year-on-year. Management expenses dropped sharply by 18.73% to 1.29B yuan, effectively controlling items such as employee compensation, office expenses, and depreciation; sales expenses decreased by 6.02% to 0.053 billion yuan, with optimized sales models showing results.

Despite revenue decline, AVIC Xi’an Aircraft increased R&D investment “against the trend,” with annual R&D expenses growing by 3.17% compared to the previous year, mainly for phased independent technological investments. Additionally, the company increased research funding by 1.05B yuan, a 113.6% increase from 53M yuan last year. These funds are mainly used for specific military R&D projects. The next-generation transport and bomber aircraft are under rapid development, which will not only strengthen the company’s technological barriers in military aircraft but also unlock huge market potential in future defense upgrades.

By the end of 2025, the company’s R&D personnel increased to 1,901, accounting for 7.68%, with 66.07% holding master’s degrees or higher, accelerating the building of a high-education talent team. The company received 38 science and technology awards, applied for 699 invention patents, and obtained 448 patents, an 81.4% increase in authorized patents. This “cost control and R&D preservation” strategy reflects the unique attributes of aerospace manufacturing—long technology iteration cycles and capital-intensive processes—only sustained investment can secure a competitive edge in next-generation products.

The 2026 target demonstrates the company’s cautious strategic focus. In response to market concerns, AVIC Xi’an Aircraft set its 2026 revenue target at 40.2 billion yuan, further lowered from 2025. This “negative growth” expectation is not due to lack of confidence but out of respect for industry cycles—the large aircraft industry is transitioning from “R&D breakthroughs” to “industrialization and mass production,” requiring time for capacity ramp-up, process solidification, and supply chain integration.

From an industry perspective, AVIC Xi’an Aircraft is in a strategic “crouch and leap” phase. The large-scale delivery of the C919, the advancement of the C929 project, and steady military aircraft demand form the three pillars supporting the company’s medium- and long-term growth. However, in the short term, high R&D and capacity-building investments will create a lag before profits are fully realized—an inevitable pain point in the aerospace industry’s shift from “project-based” to “industrialized” development.

AVIC Xi’an Aircraft’s 2025 annual report is a microcosm of China’s aerospace manufacturing industry’s transformation and upgrading. Short-term revenue fluctuations cannot obscure the substantial improvement in profit quality, and strategic breakthroughs in civil aircraft signal a shift in growth momentum. As domestically produced large aircraft move from “building” to “using,” AVIC Xi’an Aircraft stands at the beginning of a new cycle. For this enterprise carrying national strategic missions, more important than short-term financial data are its ongoing accumulation of technological strength and industry influence in high-end equipment manufacturing.