AVICHINA (HKG:2357) shares plummeted 5.16% in intraday trading on Monday, following the release of its full-year 2024 financial results that fell short of market expectations. The company reported a significant decline in profitability despite a modest increase in revenue, disappointing investors and analysts alike.
According to the company's filing with the Hong Kong Stock Exchange, AVICHINA's net profit attributable to owners fell 11% to 2.19 billion yuan in 2024, down from 2.45 billion yuan in the previous year. Earnings per share (EPS) declined to 0.274 yuan from 0.311 yuan year-on-year. While revenue rose 2.6% to nearly 87 billion yuan, it missed analyst estimates by 7.2%, further contributing to the negative market sentiment.
The decline in profitability can be attributed to higher expenses, particularly in research and development, which amounted to 6.66 billion yuan or 41% of total expenses. Despite the challenging results, AVICHINA's board of directors recommended a dividend of 0.081 yuan per share, to be paid on or before June 25 to shareholders registered by May 30. The market's sharp reaction to the earnings miss reflects growing concerns about the company's ability to maintain profitability in the face of rising costs and competitive pressures in the aerospace and defense industry.
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