HK Stock Market Move | With AERO TECH (00232) rising by over 15% in early trading, it is expected that the company's net profit for the first half of the year will increase nearly sevenfold. The company is a manufacturer of general aviation piston engines.

CON AERO TECH (00232) rose more than 15% in early trading, rising 15.19% to 0.182 Hong Kong dollars as of the end of the report, with a turnover of 15.73 million Hong Kong dollars. On the news front, CON AERO TECH plans to hold a board meeting on August 28 to approve its mid-term performance. The company had previously expected to record a profit after tax of not less than 55 million Hong Kong dollars in the first half of the year, compared to 7.05 million Hong Kong dollars in the same period last year, mainly due to the completion of new factory building, investment in new production equipment, and the gradual stabilization of the new enterprise resource planning system, as well as the continued promotion of the "world-class manufacturing" production management system, which significantly increased the production capacity of general aviation aircraft piston engines in the first half of the year, leading to an increase in order delivery compared to the same period last year, thereby driving the group's overall revenue and gross profit performance. Softbank Greater China released a research report in May this year stating that mainland aviation technology is the world's leading manufacturer of general aviation piston engines. According to the delivery volume of new piston aircraft engines in 2024, the market share will reach 28%, an increase of 2 percentage points from 2023, ranking second globally. The report pointed out that mainland aviation technology is a scarce target in the Hong Kong-listed general aviation industry chain. The company has cash reserves of approximately 800 million Hong Kong dollars, does not hold bank loans, and cash accounts for about 80% of its market value. The past P/E ratio after deducting cash is 3.5 times. The current valuation is believed to overly reflect political risks associated with the company's operations in the United States. The company ranks second globally and is a major supplier to the US market, and it is believed that there is little chance of disruption.