Trans-Pacific Aerospace Company, Inc. (OTC:TPAC) deals in aerospace bearing technologies and is a manufacturer of spare parts for both new and existing commercial air fleets. Its main product line includes self lubricating spherical bearings, which help in different function of flight and landing controls.
The news is up for Trans Pacific, as recently they announced the opening of their new manufacturing and assembling facility located in Zhongshan Guangdong, China.
The new production facility is opened in China through Godfrey (China) Ltd of which Trans-Pacific owns 25 percent of total outstanding shares.
Trans-Pacific Aerospace Company, Inc. anticipates this opening of manufacturing facility as a big move towards more global revenue generation. The latest step will introduce a new market segment and more doors for Trans-Pacific for growth and promises more future business.
Trans-Pacific Aerospace Company, Inc. management has been in negotiations with Aviation Industries of China (AVIC) on many long term initiatives. China own manufactured Jumbo Jet named as Comac 919 will start be started for production by next year and will be properly launched by 2016.
Now AVIC is a company with annual revenue of $21.0 billion and is the major shareholder of Comac 919. Trans-Pacific sure has knocked the right door to ensure its future business sales. It is expected that Godfrey (China) Ltd will manufacture the most parts of Comac 919 too.
Further AVIC is also a manufacturer of regional jets like ARJ-21. Watch out for Trans-Pacific as it has sure devised the right strategy to make profits.
Highlights
Opportunity for Growth Through Acquisitions and Entrance into China
TPAC plans to use the PROPRIETARY aerospace bearing technologies of the acquired Harbin Aerospace Company, LLC. to manufacture and sell component parts for new and used commercial aircraft, initially through a joint venture in China. This will enable the company to enter the high growth Asian market, which is expected to grow robustly in the next decade. Hence, this is a fantastic opportunity for the company to tap the significant growth opportunities in the Asian market. The acquisition and partnership route to drive its growth could be a lucrative decision since this could enable TPAC to leverage the expertise of the local companies and experts and thereby drive profitable growth.
Growing Market Opportunity
The performance of the aerospace and defense market is forecasted to grow at an anticipated CAGR of 4.7% between 2009-2014. The demand for aircraft component part design, engineering and manufacturing is expected to grow at an even faster pace as there is a huge after sales market. Industry experts expect this market to grow at a CAGR of 6% between 2010-2015. The steady growth of the market makes it more attractive to new entrants, like TPAC particularly in the Asia-Pacific region where there is more potential for future growth.
Innovative Aircraft Products
TPAC is set to manufacture self-lubricating spherical bearings, components in demand not only for new aircrafts but also in the after sales market. There is a significant market for these products... plus the company plans to invest in research and development to innovate better, safer and greener products. TPAC is also looking at developing and manufacturing advanced components that will reduce flight critical risks.
Technicals Look Strong and Point Upwards
The momentum is building and it looks like demand is starting to flow in more everyday. Specifically, the symbol is trending along the upper Bollinger band. Stocks following or "walking" along the upper Bollinger Band provide good signals for those wishing to trade trending or directional stocks - the idea here is to trade in the continuing direction of the stock which is UP. Also, Barchart.com and StockTA gave a BUY rating and it looks like we could see a breakout any day now! Now that we finally saw a dip we have the perfect opportunity to jump in!
Industry Press
Rediff - Airline industry to bounce back soon
The airline industry globally is expected to bounce back to its pre-recession traffic levels in two or three months, International Air Transport Association (IATA) has announced.
It said that in February 2010 international passenger demand was up 9.5 per cent while cargo demand grew by 26.5 per cent over figures in February 2009.
Asia-Pacific carriers posted strong traffic growth of 13. 5 per cent, which was partly boosted by the timing of the Chinese New Year.
Compared with the mid-2009 low, there has been a 19 per cent rebound, IATA CEO and director general Giovanni Bisignani has said. These are strong gains, but it must be noted that February 2009 marked the bottom of the cycle for passenger traffic during the global economic recession.
Passenger demand must recover by a further 1.4 per cent to return to reach pre-crisis levels. Cargo hit bottom in December 2008, with little improvement realised by February 2009.
Cargo traffic, which plunged much more than the passenger demand, has a further 3 per cent to recover in order to return to pre-crisis levels, Bisignani has said. He noted that though the industry was moving to pre-recession traffic levels, it was still not a full recovery.
"The task ahead is to adjust to two years of lost growth," Bisignani added. The highlight for February was improved load factors--the actual passenger carrying capacity of the airline that was utilised--stood at 75.5 per cent.
Considering that February is traditionally the weakest month for travel, and if seasonally adjusted, this translates to an all-time record February load factor of 79.3 per cent. Airlines are maintaining normal aircraft utilisation on short-haul fleets but long-haul utilisation is down over 8 per cent compared to 2008 levels.
The resulting increase in unit costs for long-haul operations may delay the positive impact of stronger demand to the bottom line, IATA said. It has noted that European Carriers posted the weakest growth at 4.3 per cent, while North American Airlines posted weak growth of 4.4 per cent.
On International Cargo Demand, IATA said that European Airlines benefited the least from strong upturn in air freight volumes while Asia Pacific saw a rebound of 34.5 per cent.
