\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 862 Avic Aviation High-Technology Co.Ltd(600862) )
Event: the company released its 2021 annual report. In 2021, the company achieved revenue (RMB 3.808 billion, year-on-year + 30.77%), net profit attributable to the parent (RMB 591 million, year-on-year + 37.25%), and net profit not attributable to the parent (RMB 548 million, year-on-year + 48.88%). In a single quarter, 2021q4 company achieved revenue (RMB 957 million, year-on-year + 66.61%, month on month + 4.49%) and net profit attributable to parent company (RMB 23 million, year-on-year – 23.78%, month on month – 87.55%).
1. 2021: as the main performance source of listed companies, AVIC composite materials has a year-on-year increase in net profit of 37.60%, and the operation of other businesses is relatively stable.
1) AVIC composite materials: in 2021, it achieved revenue (RMB 3.553 billion, + 33.08%), net profit (RMB 685 million, + 37.60%, accounting for 116% of the net profit attributable to the parent company of the listed company), accounts and notes receivable from the listed company (RMB 1.676 billion, + 47.26%), contract liabilities (RMB 696 million, + 530.59%) The advance payment (RMB 131 million, + 32.64%) and other data show that the sales volume of AVIC composite prepreg and the purchase volume of carbon fiber have increased. From the perspective of related party transactions, the actual amount of goods sold by the company and subordinate units of AVIC in 2021 was (2.773 billion yuan, year-on-year + 18.75%), lower than the expected 3.5 billion yuan in 2021, mainly due to the change of product demand rhythm of some customers. It is estimated that the company will sell 3.8 billion yuan of goods to AVIC subordinate units in 2022, an increase of 37.01% over the actual amount in 2021. In 2021, the company made progress in many application fields: in terms of cr929, it was selected as the only supplier of COMAC’s cr929 front fuselage work package to complete the research and development task of cr929 front fuselage; For C919, carry out the optimization design of C919 tail wing and cooperate to complete the detailed design of vertical stabilizer; In terms of ag600, we have completed the development, airworthiness tagging and delivery of ag600 ailerons, rudders, wing fairings and other products; In terms of engine, the company has completed the research and development of composite fan blades, runner sectors, cascades and other products.
2) machine tools: in 2021, the company achieved revenue (139 million yuan, + 8.85%) and net profit (- 30 million yuan, compared with – 37 million yuan in the same period last year). In coordination with the industrial resources and technical advantages of AVIC, the company has promoted the transformation, upgrading and loss reduction of machine tool equipment business. In 2021, the company has expanded its business in aviation special equipment and parts projects, such as the 100 ton linear friction welding project has passed the final acceptance of major projects in 2004, the nine axis five linkage project has completed the detailed design of the prototype AVIC equipment completed the trial production of vcl1100a new prototype. It is expected that the company will solve the problems of high cost, management ability and operation mechanism by strengthening reform measures in the future.
3) Youcai Baimu: in 2021, it achieved revenue (87 million yuan, + 58.62%) and net profit (12 million yuan, + 469.11%). In terms of civil aviation braking, the company achieved a revenue of 68 million yuan and completed airworthiness certification of one model aircraft brake disc pair and eight wheel brake accessories; In terms of rail vehicle braking, the company achieved a revenue of 20 million yuan and completed the renewal of crh380 series EMU brake pads and the design review and sample trial production of cr400 series high-speed railway brake pads; In terms of mixed ownership reform, we have completed the confirmation of the introduction of five investors for capital and share increase by public listing of the Beijing stock exchange. At present, the asset evaluation and filing are under way, and the capital increase arrangement is expected to be completed in the first half of 2022.
4) Beijing Airlines biology: in 2021, it achieved revenue (14 million yuan, – 37.02%) and net profit (- 21 million yuan, compared with – 12 million yuan in the same period last year), which was mainly affected by the policy of “purchasing with quantity” and the persistence of the epidemic.
2. 2022: it is expected that the company’s products and downstream application fields will continue to expand, and its revenue and performance will still maintain stable growth. At the same time, the company will continue to deepen reform measures.
1) revenue and performance planning: the company’s revenue target in 2022 (RMB 4.5 billion, compared with the actual value in 2021 + 18.17%) and total profit target (RMB 893 million, compared with the actual value in 2021 + 26.49%). Among them, the revenue target of aviation new materials business (RMB 4.376 billion, compared with the actual value in 2021 + 19.20%) and the total profit target (RMB 992 million, compared with the actual value in 2021 + 24.78%); Machine tool business revenue target (108 million yuan, actual value in 2021 is 139 million yuan), total profit target (- 28 million yuan, actual value in 2021 is – 30 million yuan).
2) products and downstream applications: from the perspective of products, in 2021, the company signed the license agreement for the implementation of advanced aviation composite series prepreg technology with the manufacturing Institute to create conditions for the industrialization of domestic T800 prepreg, and plans to break through the technical bottleneck in 2022. At the same time, it is expected that Youcai Baimu will complete the bench test and PMA certification of aircraft carbon brake products, the machine tool business, and the development and project acceptance of the prototype of nine axis five linkage turning and milling composite center and the prototype of qiaosan CNC gantry milling machine in 2022. From the perspective of downstream application, it is expected to complete the research, research and test delivery of composite parts of multi type civil aircraft and civil engine in 2022.
3) continue to deepen reform: in 2021, the company completed various reform tasks in accordance with the three-year action requirements of state-owned enterprise reform, including continuously improving labor efficiency (per capita income increased by 37.6% year-on-year), continuously promoting the formulation of medium and long-term incentive schemes, establishing a tenure system and contractual management mechanism for all levels of management Formulate market-oriented selection and employment system of professional managers and market-oriented employment system. According to the company’s work ideas in 2022, it is expected that the company will adhere to deepening reform in 2022, including: completing the capital and share increase of Youcai Baimu, promoting the equity diversification reform of Beijing Airlines biology and aviation intelligent equipment, and actively promoting the transformation and application of prepreg technology to non aviation market.
3. Avic Aviation High-Technology Co.Ltd(600862) is the core enterprise in the field of aviation prepreg in China. In 2021, the net profit of AVIC composite materials accounted for 116% of the net profit attributable to the parent company of listed companies, and it is still the main source of performance. Its revenue CAGR was 28.40% and net profit CAGR was 42.21% from 2017 to 2021. We judge that with the continuous expansion of military aircraft discharge, civil aircraft and commercial development, the penetration rate of superimposed equipment carbon fiber composite materials has increased, The company’s performance is expected to maintain stable growth in the next five years.
Track: carbon fiber composite has the characteristics of light weight, high strength, corrosion resistance and fatigue resistance, and its penetration rate is increasing in continuously updated equipment. It is a military sub track with long-term growth attributes. 1) Military: Taking the fixed wing aircraft as an example, in 1969, the consumption of carbon fiber composite material of American f14a fighter was only 1%, and the consumption of F35 of the fourth generation aircraft was as high as 36%; 2) Civil: at present, the amount of composite materials for advanced civil aircraft is developing to 50%, and the amount of composite materials for Airbus A380 is up to 23%; The amount of Boeing composite can reach 787%; In the future, the amount of composite materials for domestic large aircraft C919 and cr929 can reach 20% and 50%.
Company: AVIC composite, a wholly-owned subsidiary, plays a leading role in the field of aviation prepreg in China and is the core card enterprise on the carbon fiber composite track. 1) High barriers create a good industrial position: AVIC composites has established a deep moat in the field of China’s aviation prepreg: the accumulation of technology and data creates high barriers, and the R & D strength is the foundation. Superimposed with military market access barriers, it creates a stable market pattern. AVIC composites is expected to fully enjoy the spatial expansion of China’s aviation prepreg industry in the future. 2) Determination of growth path: under the background of Comprehensively Strengthening military training and preparation, military aircraft enter the period of mass loading, which brings high deterministic and high growth demand for military prepreg. At the same time, based on the military, the company vigorously promotes the application of aviation composite technology in the fields of civil aircraft, automobile, rail transit and new energy, so as to further open the growth space.
Investment suggestion: we believe that Avic Aviation High-Technology Co.Ltd(600862) as the core card enterprise of China’s aviation prepreg, under the background of large-scale loading of military aircraft and the arrival of commercial aircraft, will achieve high growth with high certainty. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 809 million yuan, 1093 million yuan and 1407 million yuan respectively, with corresponding valuations of 40x, 29x and 23x respectively, maintaining the “buy” rating.
Risk tip: capacity release and downstream demand are less than expected.
