\u3000\u3000 Xi’An Triangle Defense Co.Ltd(300775) (300775)
Events
The company released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company will be 410-45 million yuan, with a year-on-year increase of 100.58% – 120.15%; The net profit deducted from non parent company was about 402.5 million yuan – 442.5 million yuan, with a year-on-year increase of 120.08% – 141.95%.
Brief comment
Orders continued to grow throughout the year, and net profit after deduction rose sharply
In 2021, the net profit attributable to the parent company is expected to be 410-450 million yuan, with a year-on-year increase of 100.58-120.15%; The net profit deducted from non parent company was 403-443 million yuan, with a year-on-year increase of 120.08-141.95%. Benefiting from the sharp rise of military sales orders compared with the same period last year, coupled with the continuous improvement of the company’s operation and management level, the profitability is significantly enhanced, and the performance is expected to achieve high speed
Growth.
The company achieved a revenue of 467 million yuan in 21h1, a year-on-year increase of 45.28%; The net profit attributable to the parent company was 165 million yuan, a year-on-year increase of 64.06%. From the perspective of business structure, die forging products performed prominently, with a revenue of 443 million yuan, a year-on-year increase of 71.40%. R & D expenses in 2021h1 increased by 59.23% year-on-year to 19 million yuan. Benefiting from continuously strengthening innovation investment, the company has participated in the whole stage from pre research to finalization of important military equipment models such as new generation fighter and large transport aircraft. In 2021, the growth rate of net profit attributable to the parent company was much higher than that in 2021h1, and the profitability of the company showed a continuous growth trend.
Layout the special processes of aviation parts and components to meet the requirements of the development of aviation industry
National policy support creates a good environment for the development of aviation equipment industry. There is a large market demand for aviation parts and components and high product requirements. According to the company’s calculation, the demand for advanced fighters is urgent in the future, and the scale of the 14th five year plan may exceed 200 billion yuan. In addition, the scale of the civil transportation industry continues to expand, and the development of domestic large aircraft accelerates, driving the rapid development of the upstream aviation parts manufacturing industry.
On December 7, 2021, the company announced to invest 156 million yuan in the special process capacity construction project of aviation parts, focusing on the extension of the company’s main business industrial chain, optimizing the company’s industrial layout and industrial structure, developing aviation special process technology and forming large-scale processing capacity. After the completion of the project, the company will open up the whole process production capacity of “forging production – machining – special process treatment”, realize the upgrading and transformation from the production of parts to the whole process manufacturing of aviation parts, fully meet the requirements of the main engine factory for the delivery status of parts, and improve the core competitiveness of the enterprise.
Strong R & D strength, production equipment and production technology continue to lead
The company is the core supplier of China’s military aviation heavy forgings. It continues to strengthen R & D and innovation investment and build high technical advantage barriers. The company has strong technical R & D strength and production and manufacturing capacity, and has obtained the qualification required for the production of military products. It has been focusing on the field of forgings such as titanium alloy, superalloy and high-strength steel. It has rapidly developed into a professional forging enterprise providing all kinds of forgings to aviation, Aerospace and other industries. In 2019, the company was listed on the Shenzhen growth enterprise market and raised funds for the construction of “400mn die forging hydraulic press production line technical transformation and deep processing construction project”, “engine disk and ring advanced manufacturing production line construction project” and “public service platform project of military civilian integration physical and chemical testing center”.
On June 9, 2021, the company raised 904 million yuan of convertible bonds, and all the raised funds were used for the intelligent interconnection manufacturing base project of advanced aviation parts, mainly to build the digital intelligent manufacturing production line of aviation precision parts and the intelligent manufacturing production line of aircraft skin mirror milling. After the project is completed and put into operation, the company’s business industrial chain will be further improved and the production capacity structure will be further enriched. On December 7, 2021, the company announced to invest 156 million yuan in the special process capacity-building project of aviation parts. After the project is completed, the annual output of titanium alloy integral frame, sub frame, long beam, short beam, landing gear, rotor and other special process parts is 2380.00 pieces / year; The annual output of special process parts such as aluminum alloy head window frame and fuselage structure is 450.00 pieces / year; And form a certain chemical milling processing capacity of aviation parts. Cooperate with the main engine factory to realize the transformation of the mode of “supply chain management + assembly integration”, and the forging products of the company realize the transformation from the state of forging blank to the state of rough machining or finish machining delivery or even parts delivery. We believe that benefiting from the two-way pull of military and civilian demand, the overall business scale, business performance and market competitiveness of the company will be further improved and enhanced.
Profit forecast and investment rating: continuously improve the core competitiveness, be optimistic about the medium and long-term development space, cover it for the first time, and give a “buy” rating
We judge that in the future, the company is expected to open up the whole process production capacity of “forging production – machining – special process treatment”, realize the upgrading and transformation from the production of parts to the whole process manufacturing of aviation parts, and realize the large growth of production and sales within three years based on the existing production and sales scale, so as to further consolidate the industry competitiveness of the company, Lay the foundation for rapid development in the next five to ten years. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 442 million yuan, 625 million yuan and 855 million yuan respectively, with a year-on-year increase of 116.06%, 41.56% and 36.79% respectively. The corresponding EPS from 21 to 23 years will be 0.89/1.29/1.72 yuan respectively, and the corresponding PE of the current stock price will be 51 / 36 / 26 times respectively. It will be covered for the first time and given a “buy in” rating.
Risk tips
1. The capacity release is less than expected
2. There are R & D risks in new products and technologies
