AVIC Shenfei recently issued an announcement disclosing the execution of daily related party transactions in 2023 and the expected situation in 2024. According to the data, the company's actual daily related party transaction volume in 2023 will reach 5548.5 billion yuan, an increase of 1584%。It is expected that the total amount of related party transactions in 2024 will reach 6106.3 billion yuan, basically the same as the estimated amount of the previous year, an increase of 094%。
It is particularly noteworthy that the amount of raw materials, fuels, and power purchased by the company from related parties is expected to reach 2462.3 billion yuan, an increase of 1230%。This increase was mainly due to an increase in the volume of purchases. This trend shows that the company's demand for defense products continues to be strong and is in a boom stage.
As the downstream of the main engine factory facing the end customers, the continuous growth of AVIC Shenfei in the amount of related party procurement has a certain predictive effect on the future operation. In fact, the company has achieved year-on-year growth in related party procurement for three consecutive years during the 14th Five-Year Plan period, further validating the strong demand for its defense products.
In terms of business layout, AVIC Shenfei is committed to building an integrated platform of "research, manufacturing and repair". Through the acquisition of the equity of Jihang Company and the increase of capital, as well as the stake in the research institute and the fixed increase of capital raising construction projects, the company is gradually improving its batch repair capacity and scientific research and production task support capabilities. This will help the company build a life-cycle maintenance system for aviation equipment and complete the vertical extension of the industrial chain, thereby opening up a broad back-end maintenance market space and bringing new valuation increments.
In addition, as a leading manufacturer of fighter aircraft, AVIC Shenfei is expected to fully benefit from the demand for mass production and research models. The company's main aviation defense equipment products cover the third generation, fourth generation and other series of air force fighter carrier-based aircraft, which meet the construction needs of China's strategic air force. With the continuous improvement of the demand for leapfrog development of national defense equipment in the 14th Five-Year Plan, the development progress of the batch production demand of the company's main products is expected to be further improved and accelerated, thereby promoting the rapid improvement of the company's performance. Recently, AVIC Shenfei (600760) released its 2023 annual performance report, showing a steady performance growth trend. According to the announcement, the company achieved an operating income of 462 last year4.8 billion yuan, a year-on-year increase of 11%, and the net profit attributable to the parent company reached 300.8 billion yuan, a year-on-year increase of 31%. This achievement is mainly due to the increase in operating income and the company's continuous promotion of low-cost sustainable development strategy.
It is worth noting that the company still maintained a good growth momentum in the fourth quarter (Q4) of 2023. According to our estimates, Q4 achieved an operating income of 1161.7 billion yuan, an increase of 3% year-on-year and 1% month-on-month. Despite the decline in net profit attributable to the parent company from the previous quarter, it still achieved a year-on-year increase of 14% to 64.4 billion yuan. This performance fully proves AVIC Shenfei's solid position and strong market competitiveness in the field of aviation defense equipment.
In order to further improve production capacity, AVIC Shenfei released a fixed increase plan in December 2023, planning to raise 4.2 billion yuan for the construction of multiple projects. These projects include the partial relocation of Shenfei Company, the improvement of the capacity of composite material production line, the improvement of the capacity of titanium alloy production line, and the improvement of aircraft maintenance service support capacity. We believe that these private placement projects will help improve the company's capabilities in the field of aircraft manufacturing and lay a solid foundation for the development of new aircraft types in the future.
In addition, with the establishment of the Military Trade Development Committee by the Aviation Industry Group, AVIC Shenfei, as the main research and development base of China's aviation defense equipment, is expected to benefit from the special action of military trade and further expand the military trade business. This strategic move will bring new growth opportunities to the company and enhance its competitiveness in the global aviation market.
In terms of subsidiaries, the holding subsidiary Jihang Company increased its capital and shares through public listing, and introduced no more than 2 investors. This initiative aims to improve the basic maintenance capacity of Kyrgyzstan Airlines, including the procurement of maintenance equipment, the construction of maintenance hangars and other aspects. This will help AVIC Shenfei further improve the layout of the industrial chain and improve the overall operational efficiency. Considering multiple factors such as the company's existing product echelon, future model pipelines, incremental space in the back-end maintenance market, and the reform of the military pricing mechanism to promote the release of performance, we believe that the short, medium and long-term development trend of AVIC Shenfei is improving.
On the whole, AVIC Shenfei has shown a steady performance growth trend in 2023 and is actively planning for future development. The implementation of the private placement project, the expansion of military trade business and the capital increase and share expansion of Jihang Company will bring new development opportunities to the company. We look forward to AVIC Shenfei continuing to play its leading role in the field of aviation defense equipment in the future and achieving more brilliant performance."