\u3000\u3 China Vanke Co.Ltd(000002) 389 Aerospace Ch Uav Co.Ltd(002389) )
Event: in 2021, the company realized an operating revenue of 2.914 billion yuan (- 2.49%), a net profit attributable to the parent company of 228 million yuan (- 16.93%), a gross profit margin of 24.24% (- 1.02 PCTs) and a net profit margin of 8.28% (- 1.73 PCTs).
The decline in performance was affected by military trade: during the reporting period, the company's overall revenue scale and profitability declined, realizing an operating revenue of 2.914 billion yuan (- 2.49%), a net profit attributable to the parent of 228 million yuan (- 16.93%), deducting a net profit not attributable to the parent of 174 million yuan (- 14.70%), a gross profit margin of 24.24% (- 1.02pcts) and a net profit margin of 8.28% (- 1.73pcts). Mainly due to the impact of adverse conditions such as the epidemic on the UAV military trade market, the signing amount decreased. During the reporting period, the company's foreign business was mainly military trade business, with a revenue of 548 million yuan (- 33.19%). In this regard, the company has taken a variety of measures to actively respond, strengthened the development of foreign markets, promoted products to more than 10 user countries, and reached renewal and update intentions with a number of foreign users. According to the company's investor relations record, the company's UAV revenue ratio between China and foreign countries was about 1:1 in 2020 and close to 5:2 in 21, reflecting the rapid growth of China's demand. We believe that with the positive response of the company and the continuous expansion of business in China, the company's performance is expected to pick up in 2022.
In terms of UAV business, UAV and related products achieved a revenue of 1.118 billion yuan (+ 5.15%), accounting for 38.36% of revenue and 17.85% of gross profit margin (- 14.83 PCTs). We believe that the decline in gross profit margin is due to the increase in the proportion of Chinese business. According to the company's investor relations records, the profit margin of Chinese products is lower than that of foreign markets due to business model, delivery cycle, system configuration and other reasons, but with the increase of Chinese business volume in the future, The profit margin is expected to be further improved; The revenue of technical services was 335 million yuan (- 18.25%), accounting for 11.50% of the revenue and 50.87% of the gross profit margin (+ 11.20 PCTs). During the reporting period, the subsidiary rainbow company achieved a revenue of 1.241 billion yuan (+ 16.92%) and a net profit of 101 million yuan (- 32.33%); Shenfei achieved a revenue of 413 million yuan (- 10.11%) and a net profit of 49 million yuan (- 21.98%).
The new materials business is divided into three divisions: capacitor film, backing film, insulating material and optical film. During the reporting period, the backing film and insulating materials performed well, achieving a revenue of 800 million yuan (+ 14.08%), accounting for 27.44% of the revenue, with a gross profit margin of 24.84% (+ 14.83 PCTs), and a large increase in profitability. We think it is due to the improvement of the prosperity of the photovoltaic industry: the optical film achieved a revenue of 444 million yuan (- 9.96%), accounting for 15.24% of the revenue, and a gross profit margin of 23.55% (- 3.53 PCTs); The capacitor film has been disposed of during the reporting period, with a revenue of 158 million yuan (- 47.20%), accounting for 5.42% of the revenue and a gross profit margin of 9.50% (- 1.36 PCTs). Nanyang company, a subsidiary of Nanyang company, produces back material films, etc., with a revenue of 1.080 billion yuan (- 4.49%) and a net profit of 157 million yuan (turning losses into profits); Hangzhou Nanyang company produced optical films, etc., with a revenue of 16 million yuan (+ 79.56%) and a net profit of 03 million yuan (+ 35.60%).
In terms of expenses, the three expenses accounted for 9.32% (-0.16pcts), of which the financial expenses were 15 million yuan (- 72.83%), mainly due to the decrease in exchange losses in the current period. The R & D cost is 186 million yuan (+ 23.91%), and the R & D investment includes CH-4 enhancement, ch-5 improvement, high-performance compound wing UAV 804c, multi aircraft cooperative control algorithm, unmanned tilt rotor aircraft system development project, stealth UAV system development project, etc.
In terms of assets, the monetary capital was 1.748 billion yuan (compared with the end of the previous year + 137.20%), mainly due to the receipt of raised funds; Accounts receivable were 1.902 billion yuan (up + 9.92% from the end of the previous year) and inventories were 744 million yuan (up + 24.48% from the end of the previous year), all at the highest level in the same period of recent five years, showing the growth of orders and goods preparation.
In terms of cash flow, the net cash flow from operating activities was 38 million yuan (- 90.68%), mainly due to the increase of cash expenditure for payment of goods and settlement of current accounts; The net cash flow from investment activities was 193 million yuan (+ 213.26%), mainly due to the disposal of capacitor film business, with a total amount of 318 million yuan; The net cash flow from financing activities was 783 million yuan (+ 516.76%), mainly due to the receipt of 911 million yuan of raised funds.
In terms of related party transactions, related parties of the company include internal member units of China Aerospace Hi-Tech Holding Group Co.Ltd(000901) Group Co., Ltd. Aerospace Hi-Tech Holding Group Co.Ltd(000901) finance company, Hangzhou yongxinyang photoelectric materials Co., Ltd. and Zhejiang Nanyang Huacheng Technology Co., Ltd. The estimated amount of transactions between the company and related parties in 2022 is 3.989 billion yuan, an increase of 54.47% over the actual amount in 2021. The total estimated amount of daily related party transactions in 2021 is 3.428 billion yuan, completing 75.33% of the estimated amount.
China has the largest number of UAV export user countries, and the export quantity and amount of complete aircraft are leading in China: the company is a manufacturer with a wide range of UAV products in the world. Its mature products include rainbow 8 series rotorcraft / helicopter, rainbow-3 hollow multi-purpose UAV, rainbow-4 hollow reconnaissance / strike UAV, rainbow-5 medium and high altitude long endurance UAV, rainbow-804d composite wing vertical takeoff and landing UAV, etc., which are exported to Africa More than ten countries in Asia, and a variety of products are equipped with China. The products under research include rainbow-6 large-scale dual engine high-speed multi-purpose UAV, rainbow-7 stealth UAV, rainbow-10 unmanned tilt rotor aircraft, rainbow-101 unmanned rotary rotor aircraft, rainbow-817 micro attack UAV, intelligent cluster UAV system, cruise missile and other systems with international leading level and filling the gap in China. At the same time, the company developed the shooter series air to ground missiles in combination with the whole machine, forming the observation type products of rainbow-3 / 4 / 5 UAV, which won many times in the competition with the United States, Israel and other countries. At the same time, traction suppliers have developed four in one loads to complete more than ten kinds of mission loads such as various photoelectric equipment, high-definition cameras, radar equipment and electronic reconnaissance equipment. During the reporting period, Taizhou production base has been equipped with the overall structure production capacity of medium and large UAVs.
The military trade market has developed steadily and the Chinese business has been actively explored: in terms of military trade, according to the company's announcement, the scale of the global UAV industry has exceeded 100 billion yuan and China has exceeded 40 billion yuan. The demand is mainly concentrated in Asia and Africa. It is expected that the export market will maintain a stable development trend in the medium and short term. We believe that the company has achieved mass export since 2004, has a certain customer base in the military trade market, and has formed a brand effect. In the future, it will develop stably with market demand and customer development. In China, with the increase of China's national defense budget year by year, the large-scale procurement of weapons and equipment during the 14th five year plan and the continuous improvement of the status of UAVs in China's equipment development, the demand of Chinese users has surged. According to the company's announcement, the market research report shows that the market scale of China's military UAV is expected to reach 35 billion yuan by 2023, with an average annual compound growth rate of 23%. It is estimated that it will exceed 50 billion yuan by 2025.
In terms of civil use, the company completed the signing and performance of several projects represented by emergency mapping projects during the reporting period. Ch-4b UAV has obtained the airworthiness qualification of China's first medium and large UAV, which will support the application and promotion in civil fields such as forest fire prevention, aerogeophysical exploration and emergency rescue. We believe that if we can seize the large-scale procurement opportunities brought by the demand for national defense construction and the development of leapfrog weapons, the development of the company's business in China will further open up market space and support the improvement of revenue scale and profitability.
Focus on the field of high-tech film and complete the overall disposal of capacitor film business: during the reporting period, the company completed the overall disposal of capacitor film business, with a total amount of 318 million yuan. It further focused on the development of core business, improved the competitiveness of main products, and formed two new material business fields: functional polyester film and optical film. Functional polyester film products are mainly used in Cecep Solar Energy Co.Ltd(000591) backplane base film in the photovoltaic industry. The company is one of the first manufacturers to engage in Cecep Solar Energy Co.Ltd(000591) backplane base film manufacturing in China, with a leading market share in China, and ultra-thin polyester film materials break the Japanese import monopoly of high-end thin polyester film. The optical film business basically covers all the optical film categories required by the liquid crystal display industry. It has become a supplier of optical film products for well-known liquid crystal panel manufacturers at home and abroad. During the reporting period, Ningbo dongxucheng, the holding subsidiary of the company, basically completed the expansion project of 50 million square meters of reflective film production line, with a project progress of 83.25%. The production line commissioning is under way, which will further improve the profitability and market share of the company's optical film. We believe that the company's focus on the development of high-tech film field, closely following the national requirements for "building core competitiveness" in the field of new materials and realizing the domestic substitution of key materials as soon as possible, is conducive to further consolidating its technology and market leading position in relevant fields.
Completed the non-public offering of A-Shares and implemented the fund-raising of 911 million yuan: during the reporting period, the total fund-raising of the company's non-public offering of shares was 911 million yuan, which was invested in the development of new concept UAV, the scientific research and industrialization of low-cost airborne weapons and supplementary working capital. As of December 31, 2021, a total of 265 million yuan has been invested in the raised funds to supplement the working capital. The development and industrialization projects have paid a total of 285724 million yuan from the non raised funds account, and the raised funds will be used for replacement in the future. Guided by the application requirements of UAVs under the new situation, the company will carry out model development and test verification around advanced UAV systems such as stealth, high-speed, long-range and vertical take-off and landing, so as to maintain the leading position in the industry.
After restructuring the UAV business, the company launched the stock incentive plan for the first time: on February 5, 2022, the company announced that it had completed the grant registration of the restricted stock incentive plan in 2021 and granted 8682056 million restricted shares to 271 people at a grant price of 12.80 yuan / share. The performance evaluation target of the granted rights and interests to lift the restrictions on sales is based on the performance in 2020, and the compound growth rate of net profit in 2022 is no less than 9.5%; The compound growth rate of net profit in 2023 shall not be less than 10%; The compound growth rate of net profit in 2024 shall not be less than 10.5%. The company's last equity incentive was in 2014. In 2017, it implemented a major asset restructuring and introduced the UAV business. This is the first stock incentive plan launched after the restructuring of the UAV business.
Investment suggestion: we believe that the company is the unit with the largest number of UAV export users in China, and the export quantity and amount of complete machines are leading in China. ① The stable development of military trade market and the development of business in China will further open up market space and support the improvement of revenue scale and profitability; ② Focus on high-tech film field and complete the overall disposal of capacitor film business; ③ With the increasingly complex and changeable war environment in the future, the role of UAV will gradually become prominent. In the UAV equipment planning, China clearly regards UAV as an important force and key equipment of the future equipment system, and the company will continue to benefit from national policy encouragement and industry position advantages.
We predict that the company's net profit attributable to the parent company in 2022, 2023 and 2024 will be 407 million yuan, 478 million yuan and 550 million yuan respectively, EPS will be 41 million yuan, 48 million yuan and 55 million yuan respectively, and the corresponding PE of the current stock price will be 46.17 times, 39.44 times and 34.42 times respectively. Combined with the company's profitability and the prosperity of the industry, and with reference to the average level of the same industry, the company will be given a PE level of 67 times in 2021 and a "buy" rating with a target price of 27.60 yuan.
Risk tips: macro policy changes, weak overseas markets due to the epidemic, less than expected technology research and development, raw material price fluctuation risk and exchange rate fluctuation risk.
