AviChina Industry & Technology : Interim Report of 2023

中 國 航 空 科 技 工 業 股 份 有 限 公 司

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code : 2357)

2003-2023

A N N I V E R S A R Y

2023

INTERIM REPORT

CONTENTS

1. Highlights of Interim Results
2. Management Discussion and Analysis

1. Disclosure of Interests and Other Information

1. Consolidated Balance Sheet

1. Balance Sheet of the Company

1. Consolidated Income Statement

1. Income Statement of the Company

1. Consolidated Cash Flow Statement

1. Cash Flow Statement of the Company

1. Consolidated Statement of Changes in Shareholders' Equity

1. Statement of Changes in Shareholders' Equity of the Company

1. Notes to the Financial Statements

103 Corporate Information

HIGHLIGHTS OF INTERIM RESULTS

The board of directors (the "Board") of AviChina Industry & Technology Company Limited (the "Company") hereby announces the unaudited interim results of the Company and its subsidiaries (collectively, the "Group") for the six months ended 30 June 2023 prepared according to the China Accounting Standards for Business Enterprises.

Revenue	RMB40,873 million
Net profit attributable to the owners of the parent company	RMB1,543 million
Earnings per share
- Basic and diluted	RMB0.199
Shareholders' equity attributable to parent company	RMB30,885 million

INTERIM DIVIDEND

The Board proposed that no interim dividend would be declared and paid for the six months ended 30 June 2023.

2	AviChina Industry & Technology Company Limited

MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS REVIEW

In the first half of 2023, the global economy continued to experience a downward trend, and the economic recovery faced numerous uncertainties. China's economic encountered new difficulties and challenges, but remained positive overall rebound and long-term prospects with sustained recovery. Confronted with the complex and severe internal and external environment, Aviation Industry Corporation of China, Ltd.* (中國航空工業集團有限公司) ("AVIC") persevered through difficulties, maintaining a favorable operational momentum. It consistently intensified efforts in independent technological innovation, achieved tangible results across various tasks, and pushed forward with high-quality development. AVIC has been listed in the Fortune Global 500 for 15 consecutive years, ranking the 150th. Meanwhile, AVIC ranked the second on the Global 500 of Aerospace and Defense Industry.

In the first half of 2023, the Group was committed to building a world-class aviation high-tech industrial group, practicing pragmatism, striving hard and being united, steadily developing its businesses and actively playing the roles of scientific and technological innovation, industry control and safety support. The Company was listed in the Fortune 500 listed companies in China, ranking 212nd.

In the first half of 2023, the Group continued to promote the restructuring and integration of business. AVICOPTER PLC* (中航直升機股份有限公司) ("AVICOPTER") purchased the equity interests in Changhe Aircraft Industries (Group) Co., Ltd.* (昌 河飛機工業(集團)有限責任公司) ("Changhe Aircraft") and Harbin Aircraft Industry Group Co., Ltd.* (哈爾濱飛機工業集團有限責 任公司) ("Harbin Aircraft") held by the Company and AVIC respectively by way of issuing consideration shares, which would further integrate the helicopter business and enhance core competitiveness of the Group. China Avionics Systems Co., Ltd.* (中航航空電子系統股份有限公司) ("AVIC Avionics") completed the Share Swap and Absorption of AVIC Electromechanical Systems Co., Ltd.* (中航工業機電系統股份有限公司) ("AVIC Electromechanical") and changed its name to AVIC Airborne Systems Co., Ltd.* (中航機載系統股份有限公司) (stock name: AVIC Airborne), which would further perfect the business of aviation ancillary system and vigorously promote the systematisation, integration and intelligentisation development of the airborne industry. Meanwhile, AVIC Avionics successfully raised supporting funds of approximately RMB5 billion to further optimize its capital structure and provide financial support for the research, development and production of airborne products. The National Military-civilian Integration Industrial Investment Fund Co., Ltd.* (國家軍民融合產業投資基金有限責 任公司) ("National Industrial Investment Fund") subscribed for 261,522,000 domestic shares issued by the Company and became a strategic shareholder of the Company.

The core competitiveness of the Group's helicopter products continued to increase. The AC311A helicopter conducted a field forced landing test flight and emergency rescue exercise, and the major scientific and technological research and industrialization of AC313 large helicopter was selected as one of the top ten innovative achievements of Jiangxi Province in 2022, which reflected the continuous improvements in emergency rescue system. The AC352 helicopter successfully completed the type rating training standardization test of the Flight Standard Board to ensure efficient operation and flight safety. The AC332 helicopter completed the static test of the horizontal landing attitude under the single skid landing condition to limit the loading, making new progress in static test of the entire helicopter. The AC312E helicopter completed the test flight of the aviation remote sensing devices, which promoted the development of the aerial geophysical exploration and remote sensing application field.

Interim Report 2023	3

MANAGEMENT DISCUSSION AND ANALYSIS

The Group further enhanced its international competitiveness in general aviation products. The twin-engine turboprop commuting-typeY-12F aircraft was awarded the type certificate by the European Aviation Safety Agency (EASA), which marked the first time for a domestic aircraft to obtain EASA type certificate.

The trainer business of the Group made new progress. The first CJ-6 civil aircraft produced by Jiangxi Hongdu Aviation Industry Co., Ltd.* (江西洪都航空工業股份有限公司) obtained the standard airworthiness certificate (AC), marking the first time that the CJ-6 civil aircraft was put into operation in the civil aviation market since it obtained the production permit (PC).

The aviation ancillary system and related business of the Group developed steadily. AVIC JONHON Optronic Technology Co., Ltd.* (中航光電科技股份有限公司) ("JONHON Optronic") commenced the project of integrated system for liquid cooling source series products, which pushed forward the leapfrog development of the liquid cooling business to a new stage. The first phase of the Huanan Industrial Base Project was put into operation smoothly, which pushed the high-end manufacturing industrialization standard to a new level. The six types of products developed by Chengdu CAIC Electronics Co., Ltd.* (成 都凱天電子股份有限公司) ("AVIC Kaitian") such as atmospheric data equipment were awarded CTSOA certificates by the Civil Aviation Administration of China (CAAC), laying a solid foundation for the research and development and production of domestic civil aircraft. The smoke detector developed by Tianjin Aviation Mechanical and Electrical Co., Ltd.* (天津航空機 電有限公司) was awarded the CAAC-CTSOA certificate by the CAAC for the technical standard requirement project, which further expanded the market of civil aviation products.

The business scope of the Group's aviation engineering services business continued to expand. China Aviation Planning and Design Institute Co., Ltd.* (中國航空規劃設計研究總院有限公司) ("AVIC CAPDI") won the 20th Tien-yow Jeme Civil Engineering Prize for two projects and the 15th Gold Award of China's Construction Engineering Steel Structure for seven projects, continuously enhancing its market influence. The Group won the bid for the second final assembly line project of Airbus A320 series aircraft to better meet the market demand for Airbus aircraft; won the bid for the digital assembly production line of sensor, continuously upgrading its ability to build the digital and intelligent aviation system; won the bid for multiple ecological and environmental projects, contributing to the construction of an ecological energy environment with aviation wisdom and strength.

In the first half of 2023, the Group actively undertook economic and social responsibilities, continued to create economic, social and environmental values, implemented the "Carbon Peak and Carbon Neutrality" strategy, and made every effort to push forward the construction of green aviation, clean aviation and green zero-carbon aviation. The Group continued to improve the level of compliant operation, comprehensively enhanced the anti-risk ability, closely communicated with investors by creating various online and offline communication channels, and continuously enhanced its market image.

4	AviChina Industry & Technology Company Limited