GTHT Securities has issued a research report initiating coverage on CIRRUS (02507) with an "Add" rating. The firm forecasts earnings per share (EPS) for 2025-2027 to be $0.43, $0.51, and $0.59 per share, respectively. Based on comparable company valuations, a price-to-earnings (PE) ratio of 20 times (2026E) is applied, deriving a target price of HKD 79.76 per share. CIRRUS is a global leader in private aviation, experiencing growth driven by its SR piston aircraft and Vision Jet. Benefiting from a strong order book, expanding production capacity, and continuous product iteration, the company's future sales are expected to increase in both volume and price. The main points from GTHT Securities' analysis are as follows:
CIRRUS is a global leader in private aviation, possessing two of the best-selling aircraft models. Founded in the US in 1987, the company was acquired by the Aviation Industry Corporation of China (AVIC) in 2011, gaining financial backing and support. It currently holds a leading position in the global private aviation market (with a 32% share of deliveries in 2023) and operates dual product lines: the SR2X series (the best-selling single-engine piston aircraft for the past 22 years) and the Vision Jet (the best-selling business jet for six consecutive years). The company has demonstrated strong historical performance, with revenue CAGR from 2020 to 2024 reaching 19.53% and net profit attributable to shareholders CAGR reaching 35.22%.
The global general aviation market is experiencing steady growth, with its essential demand characteristics becoming more apparent. Driven by economic growth, relaxed credit conditions, an increase in high-net-worth individuals, airport infrastructure development, and technological advancements lowering the barriers to personal flight, the global general aviation market size grew at a CAGR of 4.86% from 2000 to 2024, reaching $26.725 billion. In terms of volume and price, the average aircraft price increased at a CAGR of 4.35% from 2000 to 2024, representing a core growth driver. The global general aviation industry has progressed through phases of boom, post-financial crisis downturn, and recovery, and is now entering a stage characterized by demand for efficiency and safety.
CIRRUS possesses outstanding core competencies, leading to continuous market share gains. The company has consistently increased its market share from 2000 to 2024, establishing itself as a global leader. Its core competitive advantages include: 1) Achieving the most critical moat of aviation safety through dual safeguards: the CAPS (Cirrus Airframe Parachute System) and SafeReturn emergency autoland system; 2) Attracting customers through clever market positioning that offers high quality-to-price ratio and strong value retention; 3) Continuous product iteration and upgrades (SR series to G7, Vision Jet to G3) resulting in optimal comprehensive performance; and 4) Expertise in composite materials manufacturing, flexible production capabilities, and a sales model that stays close to the customer.
Dual-engine growth strategy, strong order book, and potential for volume and price increases. The company's SR series holds a strong position in the piston aircraft segment and is expected to continue gaining market share due to its robust competitiveness. The Vision Jet has pioneered a "new blue ocean market" for single-engine private jets. CIRRUS currently has a substantial order backlog (1,056 aircraft as of H1 2025), with production capacity set to increase through 2025-2026. Furthermore, the proportion of higher-value-added models in its product mix is rising, supporting growth in both volume and price. There is also significant potential for future growth in after-sales service revenue.
Risk factors include: (1) Demand fluctuations, (2) Potential underperformance of new aircraft models, and (3) Cost volatility.