\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 372 China Avionics Systems Co.Ltd(600372) )
Core view
Event: the company achieved a revenue of 9.839 billion yuan (+ 12.49%) and a net profit attributable to the parent company of 799 million yuan (+ 26.62%) in 2021; In a single quarter, Q4 company’s revenue in 2021 was 2.902 billion yuan (- 1.06%), and the net profit attributable to the parent company was 224 million yuan (+ 3.70%).
Aviation products lead the growth, continuously optimize the expense rate during the period, and continuously improve the profitability. In the past 21 years, the revenue scale of aviation and non aviation defense products of the company has increased steadily, with aviation products revenue of 8.649 billion yuan (+ 13.49%), non aviation defense products revenue of 450 million yuan (+ 13.07%), and non aviation civil products revenue of 647 million yuan (- 8.10%). The gross profit margin of the company decreased slightly by -0.27pct to 29.09%, while the expense rate during the period decreased by 0.92pct to 19.86%, and the R & D expense rate increased to 8.41% from 7.40% last year. The above factors made the profit growth significantly higher than the revenue growth, and the net interest rate increased by 0.82pct to 8.31% year-on-year.
The year-on-year + 59.41% of raw materials indicates that there are sufficient orders, contract liabilities have increased significantly, and future performance may be released gradually. At the end of the 21st century, the inventory reached a new high in recent ten years, with 6.112 billion yuan (+ 28.76%), including 2.290 billion yuan (+ 59.41%) of raw materials, indicating that the company had sufficient orders and actively prepared goods for production. Due to the increase of the advance contract payment for the main engine, the contract liabilities of the company increased significantly to 1.426 billion yuan (+ 1086.9%) at the end of 21 years. The net cash flow from operating activities reached a new high of 1.55 billion yuan (+ 91.4%), and the cash flow improved significantly.
The industry is booming, and the company, as the leader of avionics system, is expected to usher in rapid development. With avionics system as its main business, the company has a comprehensive product pedigree and a wide range of application fields. It has a relatively complete avionics industry chain and is the leader of avionics system. Large installed capacity of avionics system: 1) military equipment upgrading and speed-up. It is estimated that the market space for avionics new equipment and modification will be nearly 300 billion yuan in the next decade. 2) Civil: China’s civil avionics market is expected to exceed trillion in the next 20 years. Single machine value increase: the value of single machine avionics of modern aircraft continues to increase with the development of one generation platform and multiple generations of avionics. As the leader of China’s avionics, the company has profound technology accumulation and outstanding competitive advantage. It is expected to usher in rapid development under the coordination of military and civilian business. In the context of resource integration in the aviation airborne sector, the company, as an avionics platform, hosts five powerful and large research institutes, which has great potential for resource integration within the system.
Profit forecast and investment suggestions
Considering that the compression of non aviation civil products is more than expected and the cost rate of the company decreases during the period, we adjust the profit forecast. It is estimated that the EPS in 22-23 years will be 0.50 and 0.62 yuan (0.53 and 0.69 in the last time), and the forecast for 24 years will be 0.75 yuan. With reference to the price earnings ratio of 41 times that of the comparable company in 22 years, we will give the target price of 20.5 yuan and maintain the overweight rating.
Risk tips
The confirmation progress of military orders and revenue is less than expected; The reform progress of scientific research institutes is less than expected
