\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 38 Aecc Aero-Engine Control Co.Ltd(000738) )
Event: the company released its annual report for 2021 on April 1. In 2021, the company realized an operating revenue of 4.157 billion yuan, a year-on-year increase of 18.25%, and a net profit attributable to the parent company of 488 million yuan, a year-on-year increase of 30.67%. The net profit deducted from non parent company was 466 million yuan, with a year-on-year increase of 50.17%.
The revenue increased steadily, the scale effect was prominent, and the net profit increased rapidly. On the revenue side, the company’s operating revenue achieved sustained and steady growth. In 2021, the company achieved an operating revenue of 4.157 billion yuan, a year-on-year increase of 18.25%. In the fourth quarter alone, the company achieved an operating revenue of 1.118 billion yuan, a year-on-year increase of 3.84% and a month-on-month increase of 10.28%. The company’s quarterly revenue was relatively balanced. On the profit side, the company realized a net profit attributable to the parent company of 488 million yuan in 2021, with a year-on-year increase of 30.67%. The net profit deducted from non parent company was 466 million yuan, with a year-on-year increase of 50.17%. In the fourth quarter alone, the company realized a net profit attributable to the parent company of 90 million yuan, a year-on-year increase of 113.80%, a month on month decrease of 11.07%, and a net profit deducted from non attributable to the parent company of 85 million yuan, a year-on-year increase of 595.67% and a month on month decrease of 13.96%. The increase of income scale has made the company’s profit increase significantly compared with last year. In terms of profit margin, the gross profit margin of the company in 2021 was 28.24%, down 0.79pct from the same period last year, and the net profit margin reached 11.73%, an increase of 1.11% year-on-year. Due to the impact of the global epidemic, the scale of the company’s international subcontracting business shrank, resulting in a sharp decline in the gross profit margin of the business by 5.65 PCT, resulting in a decline in the overall gross profit margin of the company. The improvement of net profit margin fully shows that the scale effect of the company is prominent.
Management efficiency has been greatly improved, and R & D investment has continued to grow. The company’s three expenses accounted for 9.25% in 2021, with a year-on-year decrease of 2.65pct. Among them, the sales expense rate remained unchanged, the management expense rate decreased by 2.39pct year-on-year, the financial expense rate decreased by 0.25pct year-on-year (the financial expense in 2021 was 220000 yuan, with a year-on-year decrease of 97.53%), and the management expense rate decreased significantly, indicating that the management efficiency of the company has been greatly improved and the operating condition has been significantly improved. In 2021, the company’s R & D expenditure was 152 million yuan, with a year-on-year increase of 4.09%, accounting for 3.65%, with a year-on-year decrease of 0.50PCT.
Full orders in hand, good payment collection and continuous improvement of business conditions. At the end of 2021, the company’s contractual liabilities were 870 million yuan, an increase of 777.79% year-on-year, indicating that the company has full orders on hand. In terms of accounts receivable, the company had 837 million yuan at the end of 2021, a year-on-year decrease of 18.53% and a decrease of 61.66% compared with the end of 21q3, indicating that the company’s collection is good and its operation is expected to continue to improve. The company’s inventory at the end of 2021 was 1.098 billion yuan, an increase of 10.17% over the end of last year and 7.05% over the end of 21q3. The growth rate of inventory is far lower than that of the company’s revenue, indicating that the company’s product delivery is smooth.
Related party transactions are expected to increase by 39.38%, and the company’s performance is expected to continue to grow at a high speed. According to the company’s announcement on December 29, 2021, the company expects to sell 4.3 billion yuan of products to units in the related party aviation launch system in 2022, an increase of 39.38% year-on-year. From 2019 to 2021, the growth rate of actual sales of goods to related party air launch systems was 8.34%, 19.21% and 23.65% respectively. Meanwhile, according to the announcement issued by downstream company Aecc Aviation Power Co Ltd(600893) on January 8, 2022, Aecc Aviation Power Co Ltd(600893) 2022 is expected to purchase products from units in related party air launch systems of RMB 11 billion, with a year-on-year increase of 36.5%. The growth rate of related party transactions has increased significantly, and the company’s performance is expected to usher in rapid growth in 2022.
Actively expand production capacity to meet the strong demand of downstream. During the reporting period, the company completed the fixed increase. In terms of assets, after the completion of the project, Beijing aviation technology and Guizhou Honglin will become the wholly-owned subsidiaries of the company. At the same time, the “aviation Park” and other related equipment plants will be injected into the listed company to further ensure the integrity and independence of the assets of the listed company and reduce related leases. In terms of business, the funds raised by the project will be used for various scientific research and production capacity-building projects of the company engaged in aviation engine control system, which will help the company quickly and effectively connect the special tasks of “two aircraft”, help the company supplement its weaknesses and improve its capacity, and support China’s development strategy from a large aviation country to an aviation power.
Investment suggestion: the sales volume of the company’s related party transactions is expected to increase significantly and the downstream demand is accelerated. We increase the company’s profit forecast. It is estimated that the company’s revenue from 2022 to 2024 will be 5.556 billion yuan, 7.119 billion yuan and 8.809 billion yuan respectively (the value before 20222023 will be 5.412 billion yuan and 6.784 billion yuan respectively), the gross profit margin will be 28.75%, 28.90% and 29.00% respectively, and the net profit attributable to the parent will be 700 million yuan, 957 million yuan 1.240 billion yuan (666 million yuan and 858 million yuan before 20222023 respectively), corresponding EPS is 0.53 yuan, 0.73 yuan and 0.94 yuan respectively. The company is a leading enterprise engaged in the research and production of aeroengine control system in China. Its main business has high technical barriers and great difficulty in research, development and production, so it maintains the “buy” rating.
Risk prompt event: military orders are less than expected; Product delivery is not as expected; The profit forecast is lower than expected.
