Wanfeng’s businesses bearing fruit in challenging times

Wanfeng’s lightweight parts and general aviation businesses bearing fruit in challenging times 

Nov 04, 2020 (China Knowledge) - Since Sep this year, Shenzhen-listed Zhejiang Wanfeng Auto Wheel (002085), through its subsidiaries, has accumulated contracts to supply 83 units of Diamond DA40 NG aircraft for Civil Aviation University of China (CAUC), Sichuan Longhao Pilot Training, and Saudi National Company of Aviation (the largest flight training school in the Middle East). These orders will be fulfilled no later than 2021, accounting for about 35% of Wanfeng's total delivery last year.

Wanfeng, the world's leading piston-engined aircraft manufacturer, serves demands from flight training, recreational use, and special missions. Its manufacturing networks are centered in Austria, Canada, and China. Since last year, the company has introduced more aircraft models to speed up expansion in China’s domestic market share; among them, is the DA40 which has outstanding competitive advantages especially for early-stage flight training. Its sales are expected to show strong growth in the next two years.

In addition to the general aircraft manufacturing, the company's automotive lightweight business has also made breakthrough favored by the Tier-1 supplier of Tesla (TSLA). Its holding subsidiary Shanghai Meridian Magnesium Products has recently signed a contract to supply magnesium alloy seat bracket to Faurecia China, with an order amount of approximately RMB 50 mln.

Another subsidiary Wuxi Xiongwei Precision Machinery Sci-Tech has also clinched a contract from Yanfeng Adient for supplying seat frame stamping parts with an order amount of approximately RMB 70 mln.

On top of this order, another subsidiary Wanfeng Magnesium Redding signed another contract with Yanfeng Adient for about RMB 160 mln. As of today, Wanfeng’s total supply contract in connection with Tesla amounts to RMB 460 mln. In the long run, it will continue to develop new products matching with Tesla and its suppliers.

An increasing order momentum will likely follow especially from its localized aircraft manufacturing coupled with the appealing Diamond brand, and extended cooperation with new energy vehicle manufacturers. If these catalysts materialize in a big way, Wanfeng could eventually see top-line growth and margin improvement in the near future.