\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 765 Avic Heavy Machinery Co.Ltd(600765) )
Event: the company recently released its 2021 annual report, with annual revenue of 8.79 billion yuan, yoy + 31.2%; The net profit attributable to the parent company was 890 million yuan, yoy + 159.1%. The net profit attributable to the parent company in 2021 was about 2.6 times that in 2020, which was consistent with the data disclosed in the previous performance express and basically in line with market expectations. In a single quarter, Q1 ~ Q4 achieved operating revenue of 1.79 billion yuan, 2.65 billion yuan, 2.09 billion yuan and 2.27 billion yuan respectively in 2021, yoy + 34.3%, + 36.8%, + 5.5% and + 56.0%; The net profit attributable to the parent company was RMB 80 million, RMB 190 million, RMB 340 million and RMB 280 million respectively, yoy + 88.8%, + 143.8%, + 127.8% and + 274.2%.
Forging and casting orders are full, and aviation business is growing rapidly. In terms of segments: 1) the forging and casting business achieved an annual revenue of 7 billion yuan, yoy + 34.5%, of which the aviation business achieved a revenue of 5.73 billion yuan, yoy + 37.0%, accounting for 85.6% of the segment revenue. Driven by meeting the needs of customers, the company’s market share grew steadily in the aviation business field; 2) The annual revenue of hydraulic environmental control business was 2.09 billion yuan, yoy + 21.8%, of which the revenue of hydraulic business was 910 million yuan, yoy + 10.4%; The revenue of heat exchanger business was 1.17 billion yuan, yoy + 32.6%. Specifically, in terms of aviation, the average monthly delivery of main products of the subsidiary Liyuan company increased by nearly 40% year-on-year, and the comprehensive output increased effectively; In terms of non aviation, Yonghong, a subsidiary, explored new energy, wind power and other emerging markets, and the orders increased significantly year-on-year.
The ability of cost control was improved and the profitability was improved. 1) the annual gross profit margin of the company increased by 1.7ppt to 28.3% year on year; 2) The R & D expense ratio was 3.9%, a decrease of 0.5ppt over the same period of last year; 3) The expense rate during the period was 9.2%, a decrease of 2.6ppt over the same period of last year; 4) The annual net interest rate increased by 4.6ppt to 11.0% year-on-year, a new high in recent 10 years. In a single quarter, the gross profit margins of Q1 ~ Q4 in 2021 are 24.4%, 29.7%, 32.6% and 25.9% respectively; The net interest rates were 4.3%, 7.3%, 16.2% and 12.4% respectively. The company’s expense control ability was improved, the scale effect was prominent and the profitability was improved.
Net operating cash flow increased, and prepayments and contract liabilities increased significantly. By the end of 2021, the company’s 1) accounts receivable and bills totaled 5.38 billion yuan, yoy + 17.1%; 2) Advance payment of RMB 300 million, yoy + 90.0%; 3) Inventory: 3.23 billion yuan, yoy + 5.6%; 4) Contract liabilities: 830 million yuan, yoy + 1168.7%; 5) The net cash flow from operating activities was 1.52 billion yuan, yoy + 130.5%. The substantial increase in contract liabilities and net operating cash flow was due to the year-on-year increase in customer prepayments and sales receipts.
Investment suggestion: the company has been deeply engaged in the field of high-end aviation forging, accumulated strong technical strength in product development and production, and formed strong technical advantages in the field of hydraulic and heat exchanger based on the background of aviation technology. As the leader of aviation forging and casting in China, During the “14th five year plan” period, the company entered a stage of rapid development. We expect the net profit attributable to the parent company from 2022 to 2024 to be 1.346 billion yuan, 1.956 billion yuan and 2.741 billion yuan respectively. The current share price corresponds to 36x / 25X / 18x PE from 2022 to 2024. Taking into account the continuous high outlook of downstream industries and the company’s core position in the industry, we give the company 40 times PE in 2022, EPS of 1.28 yuan / share in 2022 and the corresponding target price of 51.20 yuan. We maintain the “recommended” rating.
Risk tip: the downstream demand is less than expected, the industry competition pattern changes, and the order delivery progress is less than expected.
