\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 68 Avic Xi’An Aircraft Industry Group Company Ltd(000768) )
Event: the company released its 2021 annual report: in 2021, the company realized a revenue of 32.7 billion yuan, an increase of – 2.34% at the same time; The net profit attributable to the parent company was 653 million yuan, an increase of – 16.01% at the same time; Deduct the net profit not attributable to the parent company of 568 million yuan, an increase of + 52.94%, lower than the market expectation.
Key investment points
Asset restructuring occurred in 2020, and the operating performance fluctuated. Due to the implementation of asset restructuring in 2020, the company set up Guizhou Xin’an company and Xifei aluminum company, so the revenue decreased in 2021; In 2021, some receivables were not recovered, and the provision for credit impairment loss was 159 million yuan, an increase of 86 million yuan over the same period of last year; The uncollection of some receivables led to the increase of short-term borrowings and interest expenses of 151 million yuan, an increase of 77 million yuan over the same period of last year, resulting in the decrease of net profit attributable to parent company. The gross profit margin of the company in 2021 was 7.5%, and the net profit margin attributable to the parent company was 2.0%, with a year-on-year decrease of 0.3 percentage points.
Large and medium-sized military and civilian aircraft are the leaders and continue to focus on the main aviation industry. The company is the research and production base of large and medium-sized military and civilian aircraft in China. Its main business models include large and medium-sized transport aircraft, bombers, special aircraft and other aircraft products. The development of aircraft parts products has covered all the main models of domestic civil large and medium-sized aircraft, and has undertaken the research and development of the fuselage, wings and other key core components of Xinzhou series aircraft, C919 large passenger aircraft, ARJ21 regional aircraft and ag600 aircraft, At the same time, it actively participated in international cooperation and subcontracting production, and undertook the manufacturing of Boeing 737 series aircraft vertical tail, Boeing 747 aircraft assembly, Airbus A319 / A320 series aircraft wing, fuselage and other products. After the implementation and completion of major asset restructuring in 2020, focus on the main aviation industry and form a new development pattern with military aviation, civil aviation and aviation services as the core.
Significantly adjust the deposit limit of related party transactions and expect to harvest large orders: the company will adjust the deposit limit of related party transactions from 14 billion yuan to 75 billion yuan in 2022, adjust the originally available loan limit from 8 billion yuan to 15 billion yuan, and adjust the comprehensive credit line not exceeding 10 billion yuan to 17 billion yuan. In contrast, in 2021, Avic Shenyang Aircraft Company Limited(600760) , Avic Electromechanical Systems Co.Ltd(002013) , Aecc Aviation Power Co Ltd(600893) and other main engine plants raised the deposit limit of related party transactions before obtaining large orders. It is expected that the company will harvest large orders in the future and usher in a period of rapid business growth.
Profit forecast and investment rating: Based on the high prosperity of the military industry during the 14th Five Year Plan period and considering the leading position of the company in the field of military aircraft and civil aircraft, we predict that the net profit attributable to the parent company from 2022 to 2024 will be RMB 1.160/14.71/1.730 billion respectively, corresponding to EPS of RMB 0.42, RMB 0.53 and RMB 0.62 respectively, and PE of 65 / 51 / 43 times respectively. It will be covered for the first time and given a “buy” rating.
Risk tips: 1) downstream demand and order fluctuation; 2) The company’s profit is less than expected; 3) Market systemic risk.
