\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 372 China Avionics Systems Co.Ltd(600372) )
Event: the company recently released its 2021 annual report, with annual revenue of 9.84 billion yuan, yoy + 12.5%; The net profit attributable to the parent company is 800 million yuan, yoy + 26.6%; Deduct non net profit of RMB 690 million, yoy + 25.5%. The annual performance is consistent with the data disclosed in the performance express and basically in line with market expectations.
Promote balanced production; The net interest rate has improved year by year. In a single quarter, the company achieved revenue of 1.96 billion yuan, 2.65 billion yuan, 2.32 billion yuan and 2.9 billion yuan in 2021q1 ~ q4:1) respectively; 2) The net profit attributable to the parent company is 140 million yuan, 250 million yuan, 190 million yuan and 220 million yuan respectively, and the effect of balanced production is obvious; 3) The gross profit margin in a single quarter was 27.2%, 28.7%, 30.9% and 29.3% respectively; The net interest rates were 7.4%, 9.5%, 8.5% and 7.7% respectively. From 2018 to 2021, the company’s overall net profit margin was 6.3%, 6.9%, 7.5% and 8.3% respectively, and its profitability increased year by year. In terms of products, 1) the revenue of aviation products was 8.65 billion yuan, yoy + 13.5%, accounting for 87.9% of the total revenue, and the gross profit margin increased by 0.4ppt to 29.5% year-on-year; 2) The non aviation defense revenue was 450 million yuan, yoy + 13.0%, and the gross profit margin decreased by 9.0ppt to 20.2% year-on-year; 3) The revenue of non aviation civil products was 650 million yuan, yoy-8.1%, and the gross profit margin increased by 5.0ppt to 25.8% year-on-year. In 2021, the company’s overall gross profit margin was 29.09%, a slight decrease of 0.27ppt.
Reduce the cost rate during the period; Contract liabilities increased significantly year-on-year. In 2021, the company’s period expense rate was 19.86%, with a year-on-year decrease of 0.93ppt. Specifically: 1) the management fee rate was 9.4%, with a year-on-year increase of 0.2ppt; 2) The sales expense ratio was 1.0%, with a year-on-year decrease of 0.3ppt; 3) The financial expense ratio was 1.0%, with a year-on-year decrease of 1.9ppt; 4) The R & D cost is 830 million yuan, yoy + 27.8%; The R & D expense rate was 8.4%, with a year-on-year increase of 1.0ppt. R & D personnel accounted for 25% of the total number of the company, an increase of 9.5ppt over the previous year, and the R & D team continued to grow. By the end of 2021, the company has: 5) contract liabilities of 1.43 billion yuan, a significant increase of 1086.9% over the beginning of the year; 6) The net cash flow from operating activities was 1.55 billion yuan, yoy + 91.4%. The sharp increase in contract liabilities and the improvement in net cash flow from operations were due to the increase in the advance contract payment of the main engine, highlighting the strong demand in the downstream.
The capital increase subsidiary is ready to go; Related party transactions highlight the downstream boom. 1) In 2021, the company used its own funds of 590 million yuan to complete the capital increase of 8 wholly-owned subsidiaries, which is ready to meet the new demand of the downstream in the middle and late stage of the 14th five year plan. 2) In 2022, the company expects the total amount of related party transactions to be 2.265 million yuan, an increase of 44.7% compared with the actual total amount in 2021. Among them, it is estimated that the related procurement will be 3 billion yuan, a year-on-year increase of 64.1% compared with the actual amount in 2021; It is estimated that the related sales will be 8 billion yuan, a year-on-year increase of 38.6% compared with the actual amount in 2021. We believe that the expected substantial increase in the amount of related party transactions may reflect strong downstream demand.
Investment suggestion: as the only avionics listed platform, the company may fully benefit from the accelerated volume of downstream aviation equipment during the 14th Five Year Plan period. We expect the net profit attributable to the parent company from 2022 to 2024 to be 1.012 billion yuan, 1.212 billion yuan and 1.440 billion yuan respectively. The current share price corresponds to PE of 35x / 29x / 25X from 2022 to 2024. Taking into account the company’s scarcity and continuously improving profitability, we give 40 times PE in 2022, with EPS of 0.52 yuan / share in 2022, corresponding to the target price of 20.99 yuan. For the first time, give a “cautious recommendation” rating.
Risk warning: downstream demand growth is less than expected; The production and delivery of products are not as expected.
