(Yicai Global) Jan. 12 -- Chengdu Aircraft Industrial Group, which makes China's most advanced stealth fighter planes, is poised to go public by way of a reverse merger with automotive testing gear firm Zhonghang Electronic Measuring Instruments.

Zhonghang Electronic will purchase all equity of the Chengdu J-20 manufacturer by issuing shares to the aircraft maker’s former parent company Aviation Industry Corporation of China, the Xi'an-based buyer said in a statement yesterday. The deal is expected to close in 10 trading days.

Zhonghang Electronic’s stock price [SHE: 300114] finished at CNY10.58 (USD1.60) yesterday before being suspended from trading ahead of the backdoor listing.

Formed in 1958, CAIG develops and produces fighter planes and parts for large civil aircraft. Some of its combat models include the J-5, J-7, J-10, and Xiaolong. The firm also joined hands with AVIC Chengfei Civil Aircraft to develop parts for China's first domestically produced large passenger plane, the C919, as well as the ARJ21 regional jet.

TF Securities predicted that CAIG’s market capitalization will reach CNY200 billion (USD29.6 billion) this year, and the company will log around CNY4 billion (USD592.1 million) in net profit thanks to its future potential. 

CAIG had a CNY3.6 million (USD533,000) net profit on revenue of CNY56.7 billion (USD8.4 billion) in 2021, and had assets worth CNY151.2 billion (USD22.4 billion) as of Dec. 31 that year.

Zhonghang Electronic made a CNY195 million (USD28.9 million) net profit on CNY1.5 billion of revenue in the first three quarters of last year.

Editor: Emmi Laine, Xiao Yi