J-10 Fighter Jet Maker AVIC Chengdu Sees Shares Fall 18% in Just One Month

AVIC Chengdu, the Chinese company best known for building the J-10 fighter jet, has seen its stock price take a steep fall—dropping around 18% in just the past month. For a company that plays a major role in China’s defense industry, that’s a big drop, and it’s got investors asking: what’s really happening?

A Sudden Drop That’s Hard to Ignore

Over the past month, anyone keeping an eye on AVIC Chengdu’s stock would have seen it gradually falling, day by day. It’s not just a tiny dip—it’s the kind of decline that signals something deeper might be wrong.

So, what caused this tumble? The short answer: the company’s most recent financial results were disappointing, and that’s shaken confidence.

Profits Turn to Losses

Just a year ago, AVIC Chengdu seemed to be doing well. But in the latest financial quarter, the company reported something no investor wants to hear: a big drop in revenue and a move from profit to loss.

Their revenue fell by a whopping 71% compared to the same time last year. And instead of making money, they lost CN¥11.4 million. For comparison, they had made CN¥149.2 million in profit during the same quarter in the previous year. That’s a dramatic change—and not in a good way.

Naturally, this kind of report spooked investors, and the stock began to slide.

Experts Now Expect Less From the Company

After the financial results came out, analysts quickly adjusted their expectations. They had originally predicted stronger performance in the coming year. But now, they’ve trimmed those forecasts.

They still think the company will grow in 2024, but now expect it to make CN¥3 billion in revenue—lower than the earlier estimate of CN¥3.3 billion. Profit estimates were cut too, even though there’s still some hope things will bounce back.

All in all, the mood around AVIC Chengdu has become more cautious.

Are The Shares Still Too Pricey?

Another reason why investors are nervous is because the stock still looks expensive—even after the recent drop.

There’s something called a price-to-sales ratio, which basically compares a company’s stock price to how much money it brings in. AVIC Chengdu’s ratio is 15.5, while other similar companies are closer to 8.1. That makes it seem like investors might still be paying too much for a company that isn’t currently performing well.

It’s a bit like buying a pricey car that’s suddenly started having engine trouble—people start wondering if they’re getting their money’s worth.

What Are Investors Feeling?

Right now, the vibe among investors isn’t great. A mix of poor results, cautious forecasts, and a high stock price have made many people nervous. That’s why so many have started selling off their shares—leading to the 18% drop in value.

When a company stops meeting expectations, especially a big player like AVIC Chengdu, people take notice. And when there’s no clear plan forward yet, it adds to the worry.

What Happens Next?

Looking ahead, AVIC Chengdu will need to act fast to fix things. It will have to improve its finances, reassure shareholders, and show that it has a strong strategy to turn things around. If it doesn’t, there’s a risk the slide could continue.

Everyone—from major investors to average traders—will be watching the company closely over the next few months. A lot will depend on whether they can steady the ship and get back on course.