\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 760 Avic Shenyang Aircraft Company Limited(600760) )
Event: the company recently released 2021 annual report and 2022q1 performance forecast. In 2021, the company achieved revenue of 34.088 billion yuan, yoy + 24.79%; The net profit attributable to the parent company was 1.696 billion yuan, yoy + 14.56%; Deduct the net profit not attributable to the parent company of RMB 1.597 billion, yoy + 69.93%. The results of the annual report are consistent with the previous express report and basically meet the market expectations. In 2022q1, the company expects the revenue to increase by about 29% year-on-year; The net profit attributable to the parent company is expected to be about 509 million yuan, yoy + 47.50%. 1q22 data is better than the market expectation. We think it is mainly due to the company’s full orders and effective balanced production.
The balanced production was effective, and the 4q21 cost increased more, which affected the single quarter profit. From 2021q1 to q4:1), the company achieved revenue of 5.790 billion yuan, 10.128 billion yuan, 8.999 billion yuan and 9.172 billion yuan respectively. The quarterly difference is mainly affected by the production cycle and delivery plan of aviation products; 2) The net profit attributable to the parent company was 345 million yuan, 604 million yuan, 505 million yuan and 242 million yuan respectively, yoy – 42.29%, + 140.09%, + 61.53%, – 24.29%; 3) The gross profit margin in a single quarter was basically stable at 9.5% ~ 10%, but the net profit margin was 5.96%, 5.96%, 5.61% and 2.65% respectively. The reason for the more decline of 4q21 net profit margin was the more increase of expenses. Comparing Q3 and Q4 (the income of both is close), we can see that the management cost of Q3 is 164 million yuan and that of Q4 is 374 million yuan; The research and development cost of Q3 is 124 million yuan and that of Q4 is 277 million yuan.
The management and control ability needs to be further strengthened; R & D investment continued to increase. In 2021, the company’s 1) sales expenses were 21 million yuan, yoy + 83.81%, mainly due to the increase of exhibition expenses; 2) The R & D cost was 896.3 billion yuan, a year-on-year increase of 896.3% yoy. The company’s R & D investment has been continuously strengthened, reflecting the importance it attaches to sustainable development in the future; 3) The management fee is 809 million yuan, yoy + 13.57%. 4) The overall period expense rate was 3.65%, with a slight increase of 0.01ppt year-on-year. From 2018 to 2020, the period cost rate will be reduced from 4.25% to 3.64%. We expect that the company’s management and control ability will continue to improve in the future, and the expense rate will further decline during this period.
The lower receivable / revenue reflects the position of the industrial chain; Contract liabilities continued to grow, reflecting the boom in orders. By the end of 2021, the company’s 1) accounts receivable and bills were 3.622 billion yuan, a decrease of 31.18% over the beginning of the year, and the accounts receivable / revenue was 11%, reflecting the company’s high position in the industrial chain as the leader of the main engine; 2) The prepayment was 21.676 billion yuan, a large increase over the beginning of the year, reflecting the transmission of prepayment in the industrial chain, which is conducive to enhancing the prosperity expectation of the whole industrial chain; 3) Contract liabilities amounted to 36.54 billion yuan, an increase of 672.50% over the beginning of the year, which is still higher than the 31.2 billion contract liabilities at the end of 3q21, or reflects the strong demand of the company and the further increase of orders.? Investment suggestion: as an aircraft host unit, the company benefits from the upgrading of domestic equipment and the strong demand. We expect the revenue and profit to grow continuously. We expect the net profit attributable to the parent company from 2022 to 2024 to be 2.17 billion yuan, 2.76 billion yuan and 3.44 billion yuan respectively. The current share price corresponds to 52X / 41x / 33x PE from 2022 to 2024. Considering the continuous high prosperity of the industry and the company’s special position in the industrial chain, the attribute of scarce assets enjoys a valuation premium, giving the company 65 times PE in 2022, EPS of 1.11 yuan / share in 2022, and the corresponding target price of 72.05 yuan. For the first coverage, give a “recommended” rating.
Risk warning: tight supply chain affects production and delivery; Downstream demand is lower than expected; Technological innovation risk, etc
