\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 765 Avic Heavy Machinery Co.Ltd(600765) )
Core view
Event: the company released the annual report of 2021, and the annual operating revenue was 8.79 billion yuan (+ 31.2%); The net profit attributable to the parent company was 890 million yuan (+ 159.1%). In the fourth quarter alone, the company achieved an operating revenue of 2.27 billion yuan (+ 56.0%) and a net profit attributable to the parent company of 280 million yuan (+ 274.2%).
The performance exceeded expectations, the company’s costs and expenses continued to optimize, and the profit margin increased significantly, reaching a record high in the past decade. In 2021, the company realized a revenue of 8.79 billion yuan (+ 31.2%), a net profit attributable to the parent company of 890 million yuan (+ 159.1%), and a net profit deducted from non attributable to the parent company of 720 million yuan (+ 166.6%), which was mainly due to the increase of 136 million yuan in the disposal income of non current assets of the company due to Q4 disposal. The profit growth rate is significantly higher than the revenue growth rate, mainly due to 1) the increase of gross profit margin, which increased by 1.69pct (26.64% → 28.33%) year-on-year in 2021; 2) the expense rate decreased by 3.04pct (16.21% → 13.17%) during the period; The cost rate and R & D cost rate decreased during the 21 years, mainly due to the scale effect brought by the volume of revenue and the continuous significant improvement of management in recent years. The 21-year net interest rate was 11.00%, higher than 6.36% (+ 4.64pct) in the same period last year, and also the highest level in history in recent ten years.
At the end of the period, the contractual liabilities reached 829 million yuan, with a year-on-year increase of + 116874%, and the operating cash flow improved significantly, with a year-on-year increase of 130.48%. At the end of the reporting period, the company’s contract liabilities reached 829 million yuan, with a year-on-year increase of 116874%, mainly due to the increase in advance payment received from customers, indicating that the military industry continued to be booming and the follow-up orders were full. In 2021, the net operating cash flow of the company was RMB 1.518 billion, which was significantly improved compared with RMB 658 million last year, with a year-on-year increase of 130.48%, mainly due to the increase in customer prepayments and sales receipts.
High prosperity of military business + improved management, and the leading performance of aviation development forging and casting is expected to achieve faster growth. From 17 to 18 years, the company has successively disposed of loss making assets such as AVIC Shixin, forming a dual main industry of military forging and casting and hydraulic pressure with excellent assets and strong competitive advantage. As the leader of aviation forging and casting, the company has obvious advantages of technology + equipment + customers, benefiting from the upgrading of military aircraft + the acceleration of domestic substitution of aviation engine. During the “14th five year plan” period, the aviation forging and casting business will enter a period of rapid development. The market space of civil and foreign trade business is huge. The company actively develops and gradually increases the market share. Continue to optimize management, (1) control costs and expenses, and the three rates are expected to be further reduced; (2) launch a long-term incentive plan and the first equity incentive plan to stimulate the vitality of enterprises and further increase profits.
Profit forecast and investment suggestions
According to the increase of the comprehensive gross profit margin in the annual report of 21 years, we increased the EPS of 22-23 years to 1.18 and 1.47 yuan (the previous value was 1.01 and 1.31 yuan), and increased the EPS of 24 years 91 yuan, with reference to the price earnings ratio of 41 times that of comparable companies in 22 years, the target price was given 48.38 yuan and the buy rating was maintained.
Risk tips
The confirmation progress of military orders and revenue is less than expected; The amount of credit and asset impairment is higher than expected
