: First time covering CIRRUS(02507) with "outperform" rating and a target price of 86.72 Hong Kong dollars.

Huafu International released a research report stating that the revenue of CIRRUS (02507) aircraft is expected to reach 14.26/16.54/19.28 billion US dollars respectively from 2025 to 2027, with net profits of 1.62/1.99/2.42 billion US dollars. Based on the Discounted Cash Flow (DCF) valuation model, the bank initiated coverage with an "outperform" rating and a target price of $11.12 (corresponding to HK$86.72). Key points from Huafu International include: CIRRUS aircraft is a pioneer and global leader in the private aviation industry. Since its establishment in 1984, CIRRUS aircraft has completely revolutionized the field of personal aviation, delivering over 10,000 SR2X series aircraft and over 600 Vision Jets worldwide. By the end of 2024, the company dominated the private aviation sector with a market share of 23.2%. In terms of financial performance, CIRRUS has shown strong revenue growth, increasing from $587 million in 2020 to $1.197 billion in 2024; net profit also surged from $36 million in 2020 to $121 million in 2024, with a compound annual growth rate (CAGR) of 32.3%. Net profit margin also increased from 6.2% in 2020 to 10.1% in 2024. Steady growth in demand for private aircraft in consumer-oriented scenarios. General aviation covers all aviation activities other than military and scheduled commercial flights, including private flying and professional aviation. The global private aircraft market has seen steady growth in delivery volume and value, with average selling prices on the rise. The continuous growth in global private aircraft deliveries is attributed to the expansion of the high net-worth individual (HNWI) population and flight training numbers, as well as ongoing infrastructure development. The industry is highly concentrated, with CIRRUS particularly dominant in the piston aircraft sector. Both of its main aircraft series have seen an increase in market share. CIRRUS differentiates itself with industry-leading safety performance and a comprehensive "product + service" ecosystem. CIRRUS's product line, from the SR2X series to the Vision Jet, meets diverse market demands, with the SR series targeting the high-end piston aircraft market and the Vision Jet serving as a cost-effective choice in the turbo aircraft category. The company's competitive advantage lies in its pioneering safety features, including the life-saving "Cirrus Airframe Parachute System (CAPS)" and the revolutionary "Safe Return Emergency Autoland System". Importantly, CIRRUS has evolved beyond traditional manufacturing business to develop into a company offering a comprehensive "product + service" ecosystem, covering services such as flight training, aircraft management, and financing. This high customer retention model creates recurring income, enhances brand loyalty, and brings high repeat purchase rates and strong pricing power. Risk warning: fluctuations in raw material prices; supply chain interruptions; intensified market competition; changes in customer demand; policy changes.