\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 38 Aecc Aero-Engine Control Co.Ltd(000738) )
Event: Aecc Aero-Engine Control Co.Ltd(000738) released the annual report of 2021, realizing an operating revenue of 4.16 billion yuan in 2021, a year-on-year increase of + 18.3%; The net profit attributable to the parent company was 488 million yuan, a year-on-year increase of + 30.7%; Deduct the net profit not attributable to the parent company of 466 million yuan, a year-on-year increase of + 50.2%. The company’s operating revenue budget in 2022 was 5.1 billion yuan, a year-on-year increase of + 22.6%.
Continue to focus on the main business and deduct the rapid growth of non net profit: the company achieved a revenue of 4.17 billion yuan in 2021 and completed 108.9% of the plan; The main business of engine control system and derivatives achieved a revenue of 3.54 billion yuan, a year-on-year increase of + 19%. The company further focused on its main business and took a variety of cost reduction measures. The net profit attributable to the parent company was + 30.7% year-on-year and the net profit not attributable to the parent company was + 50.2% year-on-year. The growth rate of net profit deducted from non parent company is relatively fast, mainly due to the decrease of 38 million yuan of government subsidies included in profit and loss in 2021 compared with 2020.
The gross profit margin decreased under the influence of materials, the net profit margin increased, and the economies of scale showed: the gross profit margin of the company in 2021 was 28.2%, a year-on-year decrease of 0.8 percentage points, and the cost side was mainly affected by direct materials; The gross profit margin of international cooperation business decreased significantly. The net interest rate was 12.4%, with a year-on-year increase of 1.8 percentage points; During 2021, the company’s expenses decreased by 27.78 million yuan, the cost reduction measures were effective, the management efficiency was greatly improved, and the management expense rate was reduced by 2.4 percentage points. The R & D investment was 150 million yuan, a year-on-year increase of + 4.1%. The company continued to invest to improve its positive R & D capacity and promote high-quality development.
With sufficient orders on hand, the growth rate of related sales is expected to accelerate in 2022: the company’s contract liabilities at the end of 2021 are 870 million yuan, an increase of 770 million yuan over the beginning of the year; Advance receipts for military sales contracts increased by 750 million yuan, with sufficient orders on hand. In 2021, the related sales amount was 3.03 billion yuan, a year-on-year increase of + 19.3%; In 2022, it is estimated that the related sales amount will be 4.33 billion yuan, with a growth rate of 42.9%, and the growth rate will be further accelerated.
Fund raising to speed up project construction, comprehensively optimize and improve industrial capacity: the company continued to promote independent innovation ability and R & D investment, and accelerated the implementation of “two machines” special conditions construction projects, military fixed assets investment projects and a new round of fund-raising investment projects. In 2021, a fixed increase of 3.36 billion yuan will be raised. After completion, Beijing aviation technology, Guizhou Honglin and aviation park will become wholly-owned subsidiaries of the company to further optimize resource allocation and comprehensively optimize and enhance industrial capacity.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 670 / 880 / 1110 million respectively, and the corresponding PE of the current stock price is 45 / 34 / 27 times. The company is the leader of China’s aero-engine control system. It has a broad military and civil market space and is covered for the first time. It is rated as “overweight”.
The risk of the epidemic situation is less than the expected impact of the downstream economy; The risk that the progress of new product research and development is less than expected.
