\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 760 Avic Shenyang Aircraft Company Limited(600760) )
Event: the company released its annual report for 2021 and achieved a revenue of 34.088 billion yuan, a year-on-year increase of 24.79%. The net profit attributable to the parent company was RMB 1.696 billion, with a year-on-year increase of 14.56%, deducting the net profit not attributable to the parent company of RMB 1.597 billion, with a year-on-year increase of 69.93%. The company expects a revenue of 7.47 billion yuan in 2022q1, a year-on-year increase of about 25%, and a net profit attributable to the parent company of about 509 million yuan, a year-on-year increase of about 47.50%.
The performance continued to grow steadily, benefiting from the increase in demand and efficiency. In 2021, the company’s operating revenue was 34.088 billion yuan, a year-on-year increase of 24.79%, and the net profit attributable to the parent company was 1.696 billion yuan, a year-on-year increase of 14.56%.
The growth rate of net profit was significantly lower than that of revenue, mainly due to the significant increase of 375 million (+ 130.21%) in R & D expenses in the current period and the year-on-year decrease of 329 million in government subsidies in 21 years.
On the whole, the steady growth of the company’s performance is mainly due to two aspects. The first is the large volume of China’s aviation defense equipment. During the “14th five year plan” period, China’s demand for key core aviation equipment is expected to continue to increase. As one of the main engine suppliers, the company has benefited significantly; Secondly, the operating efficiency of the company has been improved in many aspects, and the supply chain management ability has been continuously strengthened. The company completed the annual batch production and flight test 16 days in advance in 2021. In terms of financial management, the company’s production and operation costs were effectively controlled, and the gross profit margin of sales was 9.76%, an increase of 0.53pct over the previous year; The management fee rate was 2.37%, with a year-on-year decrease of 0.24pct; The net interest rate after deducting non is 4.68%, which is significantly higher than that in 2020 by 1.24pct.
The company expects the revenue and net profit attributable to the parent company in 2022q1 to be about 7.47 billion yuan and 510 million yuan respectively, with a growth rate of about 29% and 48%. A good start in the first quarter indicates that the company’s annual performance is expected to grow rapidly.
In 2022, the estimated amount of related party transactions continues to increase, and the boom of military aircraft continues. In 2021, the amount of products and commodities sold by the company to related parties was 3.214 billion yuan, and the amount of raw materials, fuel and power purchased from related parties was 17.266 billion yuan, completing 85.33% and 90.10% expected at the beginning of the year, with a year-on-year increase of 17.13% and 38.37%. In 2022, the company expects to sell products and commodities to related parties and purchase raw materials, fuel and power from related parties to be RMB 5.600 billion and RMB 23.025 billion respectively, an increase of 74.23% and 33.26% respectively compared with the actual amount in 2021, highlighting the high prospect of the military aircraft industry chain, and the demand for key main aircraft is expected to rise again in 2022. In addition, the company expects AVIC finance to deposit 26 billion yuan, a year-on-year decrease of 97.49%, or related to the slowdown in the growth of contract orders of the company’s centralized long-term association in the future.
The collection is improved and the follow-up can be expected. The net cash flow from operating activities increased by 59.73% year-on-year due to the increase in loans received from customers. Over the same period, the company’s accounts receivable and notes receivable decreased by 26.26% and 94.65% respectively compared with the same period last year, and the collection capacity was greatly improved. In addition, the company received more large advance payments from customers in 2021, with contract liabilities reaching 36.53 billion yuan, an increase of 672.50% year-on-year and 17.24% month on month compared with the third quarterly report. The continuous growth of contract liabilities shows that the company has full orders on hand, and the subsequent rapid growth is expected.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 2.334 billion yuan, 3.014 billion yuan and 3.793 billion yuan respectively, EPS will be 1.19 yuan, 1.54 yuan and 1.93 yuan respectively, and the corresponding PE of the current stock price is 49x, 39x and 34x. With reference to the valuation of comparable companies, the valuation of the company is basically equivalent to that of its peers. As one of the manufacturers of complete fighter aircraft in China, the company has very scarce varieties, so it should give a certain valuation premium and maintain the “recommended” rating.
Risk tip: the volume of military products in the 14th five year plan is lower than expected, and the risk of gross profit margin decline.
