Seizing Aerospace Development Opportunities, Hengtian Hailong Strategically Transforms into Aeroengine Track

Source: Global Times

On March 12, 2026, Hengtian Hailong announced that the company plans to acquire at least 40% of the equity in Xi’an Qunjian Aerospace Precision Manufacturing Co., Ltd. (hereinafter referred to as “Qunjian Aerospace”) through its wholly-owned subsidiary Beijing Dofu Hailong Flight Control Technology Co., Ltd., and gain control.

In response, some analysts believe that under the backdrop of cyclical pressures facing traditional main businesses, Hengtian Hailong’s cross-industry acquisition is based on recent industry trends. After previously expanding into flight control, this marks another move into the aerospace sector. From policy benefits to the quality of the target company, Hengtian Hailong’s choice to enter the aerospace engine track demonstrates a clear strategic logic, potentially reshaping investor valuation expectations.

Following Trends to Seize the Aerospace and Space Frontiers

Hengtian Hailong’s decision to hold a controlling stake in Qunjian Aerospace is an inevitable move in seeking a second growth curve.

Industry experts point out that aerospace is transitioning from a “strategic emerging industry” to an “emerging pillar industry,” meaning China’s aerospace industry will become a new economic pillar similar to high-speed rail and 5G, supporting the national economy. As the “crown jewel” of industry, aerospace engines are not only the “heart” of aerospace industry but also the most concentrated segment of the industry chain value.

Industry estimates show that over the next 20 years, the domestic market for commercial aerospace engines will exceed 2.6 trillion yuan, with an annual scale surpassing 130 billion yuan. When combined with maintenance and after-sales markets, the total annual scale could reach 240 billion yuan. Additionally, the dual military and commercial tracks will collaboratively form a market space worth hundreds of billions, with core components and precision manufacturing of aerospace engines experiencing unprecedented growth dividends. The capital market also highly recognizes this sector.

Qunjian Aerospace’s Precise Positioning in Core Segments

Regarding cross-industry mergers and acquisitions, market attention is focused on the actual value of assets. According to Hengtian Hailong’s announcement and public information, Qunjian Aerospace is a “specialized, refined, and innovative” enterprise with over 20 years of experience in aerospace engines and gas turbines.

From a qualification perspective, Qunjian Aerospace was established in 2005 in Xi’an. It is a high-tech enterprise and a “specialized, refined, and innovative” small and medium-sized enterprise in Shaanxi Province, having passed authoritative certifications such as the national military standard quality management system. This means the company has met “hard thresholds” in technology confidentiality, quality control, and supply chain access, enabling it to serve military and high-end commercial clients.

From a business perspective, Qunjian Aerospace’s products cover five core categories: long-shaft, blades, disk rings, casings, and structural parts. It has already undertaken mass production tasks for over 2,000 parts for military aerospace engines, gas turbines, China Commercial Aircraft Corporation’s commercial engines, and space rocket engines.

Public information indicates that in 2024, Qunjian Aerospace launched R&D and manufacturing projects for aerospace engine and gas turbine components with a total investment of 420 million yuan, planning to build multiple precision processing production lines. Once completed, the annual output value is expected to reach 400 million yuan.

This expansion not only demonstrates confidence in future orders but also provides room for performance growth after the acquisition by Hengtian Hailong.

Strategic Synergy: From Traditional Industries to New Pillars in Aerospace and Low-Altitude Economy

For Hengtian Hailong, this acquisition is not just about financial consolidation but also about elevating core capabilities.

On one hand, Hengtian Hailong can leverage the credibility and financing platform of the listed company to support Qunjian Aerospace’s technological R&D and capacity expansion, helping it capture a larger market share during the industry’s upward cycle. On the other hand, the company can use Qunjian Aerospace as a core platform for deep layout in aerospace, relying on its mature customer resources (covering aerospace engines, gas turbines, etc.) to establish a reputation within the military and civil aerospace supply chain.

Hengtian Hailong stated in its announcement that it will “rely on Qunjian Aerospace’s mature technology, capacity, and customer resources to cultivate new profit growth points.” This clearly signals a strategic intention: the company is not merely making a financial investment but is aiming for industry deepening, seeking to build a true “moat” in high-end precision manufacturing through technological synergy and resource integration.

Rational View of the Intentions and Focus on Long-term Value

Of course, investors should also be rational and recognize that the current stage of the transaction is still at the letter of intent phase. The final transaction price and closing conditions will be determined after due diligence. Risks such as talent retention, management integration, and industry cyclical fluctuations are objectively present.

However, from the long-term perspective of capital markets, the support for a company’s stock price ultimately comes from sustained growth in enterprise value. Hengtian Hailong’s current market capitalization is about 3.9 billion yuan. While its traditional business provides a safety margin, this move into the precision aerospace manufacturing sector injects high-growth potential options.

Looking ahead, as aerospace policies are refined and domestic aerospace engine industrialization accelerates, the industry is expected to see a “Davis double play” of performance and valuation. Hengtian Hailong is undoubtedly poised to gain an advantage in the industry landscape.