[Headline announcement Nuggets]

China Aviation Science and Technology (02357): The subsidiary's net profit for the third quarter was about 626 million yuan, up 80.89% year-on-year

According to Zhitong Financial App, China Aviation Science and Technology announced China Aviation Airborne's third quarter results of 2023, with revenue of about 6.75 billion yuan, up 3.4% year on year; net profit attributable to shareholders of listed companies was about 626 million yuan, up 80.89% year on year; net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss was about 541 million yuan, an increase of about 2.64 times over the previous year. It is worth noting that on the same day, the company announced that the operating income of Zhongzhi Co., Ltd. for the first three quarters of 2023 was 15.751 billion yuan, up 48.41% year on year; net profit attributable to shareholders of listed companies was 293 million yuan, up 504.1% year on year. The main reason for the year-on-year increase in operating income was the increase in product delivery volume and price adjustments for some products in the current period.

Comment:All subsidiaries have achieved good results in this three-quarter report. Since the company's business is a holding model, asset utilization is insufficient. Low profit margins lead to low returns, low dividend returns, and a divergence between market value and performance. The company's core operating companies include four A-share listed companies: China Direct Co., Ltd., Hongdu Airlines, China Aviation Optoelectronics, and China Aviation Electronics. Among all holding companies, China Aviation Optoelectronics has always had the highest performance. It achieved revenue of 15.359 billion yuan in the first three quarters, an increase of 23.33% over the previous year; profitability was also relatively high, with profit attributable to shareholders of 2,894 billion yuan, reaching 26.6%. According to the China Aviation Optoelectronics Interactive Platform, the company has a cooperative relationship with Huawei. Based on the principle of commercial secrecy, it is not easy to respond to the specific cooperative business between the company and the enterprise. This business is worth looking forward to. Management believes that the aviation business has bottomed out this year, that asset injection into the helicopter business will drive strong growth next year, and also expects the company's orders to recover in the fourth quarter of this year. Continued receipt of orders for the C919 is also an important catalyst. The stock price is currently at the bottom, which is expected to lead to a revaluation of performance.

[Key Announcements Nuggets]

CGN Mining (01164): The completion rate of the plan to produce a total of 672.0tU of natural uranium in the third quarter was 99.6%

According to the Zhitong Finance App, CGN Mining announced that in the third quarter of 2023, the mines invested by the Group produced a total of 672.0tU of natural uranium, with a planned completion rate of 99.6% for this quarter. Among them, the Kazakh joint venture Semizbay Uranium Limited Partnership, which holds 49% of the Group's shares, produces 228.7 tU of natural uranium, while the other Kazakh joint company mining company Ortalek Limited Partnership, which holds 49% of the shares, produces 443.3 tU of natural uranium.

Comment:The company's recent strong trend is mainly due to the sudden rise in demand for uranium. UxC predicts that the uranium industry supply and demand gap will reach 8458.1 tU in 2030. The completion rate for the third quarter reached 99.6% this time, which can be seen as a smooth progress, laying a good foundation for the next fourth quarter. In terms of reserves, as of September 30, 2023, the Group held 1,952 tU of natural uranium (about 5.08 million pounds of U3O8), with a weighted average cost of 50.37 US dollars/pound of U3O8; held 5,495 tU (about 14.29 million pounds of U3O8) of natural uranium sales that had been signed but not yet delivered, and the weighted average selling price was 52.08 US dollars/pound U3O8. The company optimized the pricing mechanism. After adopting a new framework agreement, the sales price of self-produced trade increased from 50 US dollars/pound U3O8 in 2023H1 to 58 US dollars/pound U3O8 in 2023H1, which was higher than the spot price and long-term trade price during the same period, driving the gross profit of self-production trade to increase by 198% over the same period. In the context of a recovery in demand for downstream nuclear power, the company will benefit from an increase in trade volume and an increase in the profitability of participating mines in the future, and its performance is expected to improve dramatically.

[List of important Hong Kong stock announcements]