\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 372 China Avionics Systems Co.Ltd(600372) )
Event: China Avionics Systems Co.Ltd(600372) released the 2021 annual report, realizing an operating revenue of 9.84 billion yuan in 2021, a year-on-year increase of + 12.5%; The net profit attributable to the parent company was 799 million yuan, a year-on-year increase of + 26.6%; Deduct the net profit not attributable to the parent company of 687 million yuan, a year-on-year increase of + 25.5%. The company plans to achieve an operating revenue of 11.04 billion yuan in 2022, a year-on-year increase of + 12.2%; The net profit was 881 million yuan, a year-on-year increase of + 7.8%.
The revenue of the main aviation industry increased by 13.5% and the gross profit margin increased by 0.44 percentage points: as a professional integration and industrialization development platform of avionics system, the company’s business areas cover three directions: Defense aviation, civil aviation and advanced manufacturing. In 2021, the company successfully completed the production task of defense products, ensured the delivery task of host aircraft and continued to ensure the ordering and supply of military products; In 2021, the main aviation industry achieved a revenue of 8.65 billion yuan, a year-on-year increase of + 13.5%; The gross profit margin of aviation products was 29.5%, an increase of 0.44 percentage points year-on-year.
The overall gross profit margin decreased slightly and the net profit margin continued to increase: affected by factors such as product structure, the overall gross profit margin of the company was 29.1% in 2021, a year-on-year decrease of 0.3 percentage points; The net interest rate was 8.3%, an increase of 0.8 percentage points year-on-year. The sum of sales and management expense ratio is 10.4%, which is basically the same as that in 2020. The R & D expenditure was 830 million yuan, a year-on-year increase of + 27.8%, and the R & D expenditure rate reached 8.4%, an increase of 1 percentage point over the same period last year; It shows that the company, as the main force of Avionics System R & D and production, fully supports the task of optimization and upgrading of avionics system development and production of aviation equipment. The financial expense was 99.94 million yuan, with a year-on-year increase of – 60.6%, mainly due to the reduction of interest expense on the completion of convertible bond projects and the reversal of accrued interest on unliquidated obligations.
Promoting the strategic layout of civil aviation: the vigorous development of China’s civil aircraft industry has brought new opportunities. The company has started the establishment of its subsidiary’s civil aircraft R & D system and maintenance system. Around the implementation of the national large aircraft project, many subsidiaries have become supporting suppliers of C919 project; Product matching is carried out on ma700, ag600, general-purpose aircraft and civil helicopters, and the matching is moving steadily from equipment level to system level.
Enabling industrial development of capital increase subsidiaries: the company used its own funds of 590 million yuan to complete the capital increase of 8 wholly-owned subsidiaries and ensure that the raised investment projects are completed according to the adjusted nodes. 13 construction projects, including lighting industrialization project, electric drive and transmission system industrialization construction project, high-performance inertial sensor and application system industrialization, have supported the rapid development of subsidiaries.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 9.7/12.3/1.51 billion respectively, and the corresponding PE of the current stock price is 36 / 29 / 24 times. As China’s leading avionics enterprise, the company is based on the field of defense aviation equipment, and steadily promotes the strategic layout of civil aircraft industry and the development of advanced manufacturing business; For the first time, give a “overweight” rating.
Risk warning: the risk of intensified market competition and falling product price; Risk of shortage of raw materials and price fluctuation; The risk that the progress of new product research and development is less than expected.
