\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 862 Avic Aviation High-Technology Co.Ltd(600862) )
Core view
Event: the company released its 2021 annual report, which realized a revenue of 3.808 billion yuan (+ 30.77%) in 2021, with a planned completion rate of 100.2%; The total profit was 706 million yuan (+ 36.65%), and the planned completion rate was 96.7%; The net profit attributable to the parent company is 591 million yuan (+ 37.25%), and the net profit not attributable to the parent company is 548 million yuan (+ 48.88%). At the same time, the company disclosed its 22-year business plan: revenue of 4.5 billion yuan (+ 18.18%) and total profit of 893 million yuan (+ 26.53%).
The expense rate improved significantly and the net interest rate increased steadily. In terms of business, the new materials business achieved a revenue of 3.612 billion yuan (+ 33%), and the gross profit margin decreased by 1.04pct to 30.90%; The revenue of machine tool business was 118 million yuan (- 6.95%), and the gross profit margin increased by 9.74pct to 8.82%; The comprehensive gross profit margin was flat and increased slightly (30.07%, + 0.04pct). Thanks to the lean control of management, sales and financial expenses, the company’s expense rate during the period decreased by 2.28pct to 11.17%. However, due to the decline of other income (mainly the reduction of government subsidies by 25.23 million yuan), the increase of net interest rate narrowed, and the net interest rate in 21 years was 15.53% (+ 0.77pct).
Contract liabilities increased significantly by + 530.59% year-on-year, and operating cash flow improved significantly. Due to the increase of advance receipts from the sales of composite prepreg in aviation industry, the company’s contract liabilities at the end of the period increased by 530.59% to 696 million yuan. The company’s net cash flow from operating activities at the end of the period reached 382 million yuan, a significant increase of 145.27% year-on-year, mainly due to the increase in accounts receivable and advance collection of aviation industry composite materials. Contract liabilities and operating cash flow increased significantly, indicating that the demand for orders is accelerating and the company is actively preparing for production.
Civil aircraft prepreg, honeycomb and composite parts further open up market space. Civil aircraft is a huge incremental market with space several times that of military aircraft. The company completed in 2021: 1) signed the implementation license agreement for advanced aviation composite series prepreg technology with the manufacturing Institute to create conditions for the industrialization of domestic T800 prepreg. 2) Successfully selected as the only supplier of COMAC’s cr929 front fuselage work package, broke through the automatic forming process technology of 13m long size and hyperbolic long truss, passed COMAC’s equipment and process appraisal, and completed the research and development task of cr929 front fuselage as scheduled; Cooperate to carry out tail optimization design of C919 project, break through key technologies such as ag600 large reinforced composite materials, and complete the delivery of ailerons, rudders and wing fairings. In addition, the number of honeycomb exports delivered by the company increased significantly year-on-year, and one kind of interior honeycomb was selected into COMAC QPL catalogue.
Profit forecast and investment suggestions
According to the 21st Annual Report and the 22-year business plan, we adjusted the company’s profit expectation and predicted that the company’s earnings per share from 2022 to 2023 would be 0.57 and 0.75 yuan respectively (the previous value was 0.77 and 1.05), with a new 24-year EPS of 0.75 yuan 97 yuan. According to the price earnings ratio of 47 times in 22 years given by comparable companies, the corresponding target price is 26.79 yuan, maintaining the buy rating.
Risk tips
Model delivery progress is lower than expected; New product pricing is lower than expected risk
