Guizhou Aviation (A) (688239.SH): Undervalued forging name; dual growth engines: aero + gas turbines: New Buy

We initiate coverage of Guizhou Aviation (GATD), a leading global supplier of ring forgings to aeroengine, IGT, rocket, and nuclear power customers, with a Buy rating and RMB77 PO, derived by applying 35x P/E to 2027 EPS. We think GATD looks undervalued at 24x 2027E P/E vs. 40% EPS CAGR over 2026-28E. GATD recorded an RMB9bn order backlog at end-1H26, and we see RMB12bn by end-2026 (a 4x 2026E book-to-bill ratio). As the qualified forging supplier for major Chinese rocket producers, GATD's astronautic sales will ride on the rising rocket launches in China. Risks: weaker global IGT demand, faster capacity expansion by competitors, material price rise, geopolitical tension between US and China. Catalysts: strong orders from aeroengine OEMs and rising aeroengine localization in China. Aviation: aerospace forging poses a high entry barrier from technology and manufacturing, and it takes up to 10 years for new suppliers to start mass production from initial contact. GATD is among the few Ch