GSGH initiates on five of China’s key aerospace & defense contractors and component suppliers, and gives Buy rating on AviChina in its report, with the target price of HK$4.40. GSGH expects that AviChina will benefit from the opening up of China’s low altitude airspace and the increase on government orders and avionics equipment products. It also sees potential for AviChina to acquire more assets from its parent AVIC including assets related to electro-mechanical system products and helicopters.

Daiwa believes AviChina’s stock is undervalued, given strong and secure government orders and potential upside from the civil segment. Therefore, Daiwa gives AviChina Buy rating on initiation, and a six-month target price of HK$4.50.

Besides, Hafei Aviation, a subsidiary of AviChina, has suspended the trading of its shares due to a significant asset reorganization since 7 February 2012. With respect to this suspension, Mizuho and BOCI reiterated Buy rating on AviChina.