\u3000\u3000 Avic Aviation High-Technology Co.Ltd(600862) (600862)
Key investment points
Avic Aviation High-Technology Co.Ltd(600862) : the leader of aviation composite materials, and the new material sector has achieved high growth in the past five years
1) the company is mainly engaged in the R & D and manufacturing of aviation new materials / high-end intelligent equipment, and has a very high market share in aviation carbon fiber composite prepreg. In 2020, aviation new materials accounted for 93% of revenue and 99% of gross profit.
2) the fluctuating growth of revenue in recent years is related to the adjustment of business scope. Its AVIC composite materials (core platform of composite materials business) has achieved a compound growth rate of 20% in revenue and 31% in net profit attributable to its parent company in the past five years.
The added value of the composite industry chain is high, the core of the company is in the middle reaches, and the revenue of prepreg accounts for 90% of similar enterprises in China
1) carbon fiber composites originated in the United States and Japan, and Chinese enterprises have been catching up for a long time. At present, a complete industrial chain has been basically formed. At present, the carbon fiber production capacity of the United States, Japan and China ranks among the top three in the world. Carbon fiber composites have excellent properties and are widely used in aerospace and other high-end equipment manufacturing industries. The production chain is long, and the value jump is realized at each level.
2) the company has mastered the two core barriers of “resin system” and “process parameters” in the development and production of prepreg in the middle reaches of the industrial chain. In 2020, the revenue of prepreg accounted for more than 90% of the total revenue of prepreg of similar enterprises in China.
The company will benefit significantly from the sustained and high growth of the co driven carbon fiber composite industry in the military and civil market
1) military: the proportion of composite materials used in advanced fighters continues to increase, and the proportion of composite materials used in fighter aircraft has increased from less than 10% of the second generation aircraft to more than 30% of the fourth generation aircraft.
2) China is the second largest economy in the world, and its national defense and economy are not fully matched. The difference in the number of military aircraft between China and the United States corresponds to the 180 billion composite material market space and the more than 100 billion prepreg market space under the optimistic situation. According to the scenario analysis, if the gap is filled in 10 years, the corresponding compound growth rate in 10 years is about 23%, and the compound growth rate in the 14th five year plan is 27%.
3) civil: the proportion of composite materials for narrow body passenger aircraft is close to 20%, and the proportion of composite materials for wide body passenger aircraft can reach more than 50%.
4) COMAC predicts that 8725 Chinese airliners will be added in advance by 2039. Corresponding to the average annual 58 billion market space for composite materials and 36 billion market space for prepreg in the 14th five year plan. The company is expected to participate with the help of C919.
5) with the sustained growth of carbon fiber composite industry, the company will benefit significantly based on the card effect. Superimposed on the reform of state-owned enterprises, “improve the efficiency of state-owned capital”, encourage medium and long-term incentives, and continuously improve the asset securitization rate, the company is also expected to benefit.
Avic Aviation High-Technology Co.Ltd(600862) : the compound growth rate of net profit attributable to parent company is expected to be about 41% in the next three years
1) it is estimated that from 2021 to 2023, the net profit attributable to the parent company of the company will be RMB 650 / 900 / 1.21 billion, with a year-on-year increase of 51% / 39% / 34%, a compound growth rate of about 41%, EPS of RMB 0.47/0.65/0.87, PE of 53 / 38 / 29 times, and the PE center of the company in recent five years will be 63 times. Considering the growth persistence of the aviation composite sub industry driven by the military and civilian markets, as well as the core clamping effect of the company in the prepreg link The potential to improve the operating efficiency of companies driven by the reform of state-owned enterprises. For the first time, give a “buy” rating.
Risk tips: 1) price fluctuation leads to the decline of profitability; 2) The delivery of large-scale orders for equipment during the 14th five year plan was less than expected; 3) The progress of relevant reform measures was less than expected.
