Shares in Aerospace Industrial Development Corp (AIDC, 漢翔航空) yesterday surged by the 10 percent daily limit after the military aircraft manufacturer laid out a bullish outlook amid rising threats from China.
AIDC expects revenue and earnings per share to reach a record high this year due to demand from the defense industry and a rebound in the global air transport market, AIDC chairman Hu Kai-hung (胡開宏) said in an interview on Tuesday.
The company’s sales have grown 43.31 percent over the first seven months of this year, compared with the same period a year earlier, to NT$22.74 billion (US$712.27 million).
Photo: CNA
Net profit in the first half of this year rose 61.72 percent year-on-year to NT$1.3 billion, or earnings per share of NT$1.38, company data showed.
AIDC shares have surged 65 percent this year so far, outperforming the benchmark TAIEX’s 17 percent gain.
Taiwan faces increased pressure to fend off daily Chinese incursions across the median line of the Taiwan Strait, a tacit barrier that has separated the two rivals for decades.
Taipei is to raise its total defense spending to a record NT$606.8 billion, accounting for about 2.5 percent of GDP, a statement released on Monday by the Presidential Office said.
The partly state-backed Taiwanese company is aiming to deepen ties with Lockheed Martin Corp and other system suppliers over F-16 maintenance in an effort to bolster the nation’s defense capabilities.
The F-16 Maintenance and Support Center in Taichung, set up in 2020 with the help of the two companies, has significantly reduced the repair time needed for the air force, with some jobs previously taking as long as years, Hu said.
He declined to give details about how much time or cost the center has helped save over the years due to confidentiality.
“Deepening localization of maintenance is [a] top priority of the industry and the country” in response to rising tension across the Strait, Hu said. “This increases fighter jets’ availability, enhances technology and expands business for Taiwan’s industries.”
The F-16 maintenance center only serves the air force, but AIDC hopes it would one day handle orders from Lockheed Martin for fighter jets from elsewhere, Hu said.
The move would further integrate Taiwanese suppliers into the supply chain of the US company with more technology transfer, he added.
AIDC has received more than NT$50 billion of orders for commercial products in the first half of this year, including a 10-year contract of more than NT$35 billion to provide engine components to GE Aerospace. It also expects to deliver 66 trainer jets for Taiwan’s military by 2026, including 17 jets for this year.
Additional reporting by staff writer
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