\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 38 Aecc Aero-Engine Control Co.Ltd(000738) )
Focus on the core main business, increase the growth rate of revenue, and deduct the net profit not attributable to the parent company, with a year-on-year growth rate of 50%. In 2021, the company further focused on its main business and increased its revenue scale, realizing an operating revenue of 4.157 billion yuan, an increase of 18.25% year-on-year, mainly due to the year-on-year increase of 565 million yuan in engine control system and derivative products business; The net profit attributable to the parent company was 488 million yuan, a year-on-year increase of 30.67%, and the net profit deducted from non attributable to the parent company was 466 million yuan, a year-on-year increase of 50.17%. In 2021, the company’s gross profit margin was 28.24%, a year-on-year decrease of 0.79 PCT, mainly due to the shrinking scale of international cooperation business affected by the global epidemic, and the gross profit margin of this business decreased by 5.65% compared with the previous period. The company’s net interest rate was 12.39%, up 1.77pct year-on-year, and its profitability improved steadily, mainly due to the decline of expense rate during the period and the decrease of asset impairment loss.
During this period, the cost rate decreased significantly and the R & D investment increased. In 2021, the company’s management efficiency was greatly improved, the period expense rate decreased significantly, the sales expense rate remained unchanged, the management expense rate decreased by 2.39 PCT year-on-year, and the financial expense rate decreased by 0.25 PCT year-on-year. Due to the reduction of exchange loss and the increase of interest income, the company’s financial expense decreased significantly from 9.05 million yuan in 2020 to 220000 yuan in 2020, a year-on-year decrease of 97.53%. In 2021, the government subsidy of the company was 31 million yuan, a decrease of 39 million yuan compared with the previous period. The company continued to increase R & D investment. In 2021, the R & D expenditure was 152 million yuan, with a year-on-year increase of 4.09%. It continued to improve its positive independent R & D capability, which had a positive and far-reaching impact on the company’s high-quality development.
Contract liabilities increased explosively and orders in hand were full. In 2021, during the “14th five year plan” period, there was a strong demand for downstream military products, and the company’s large order advance payment was implemented. The contract liabilities surged from 97 million yuan in 2020 to 870 million yuan, an increase of 777.79% over the end of the previous period, of which the advance sales contract payment of military products increased from 94 million yuan to 845 million yuan, with the fastest growth. Accounts receivable decreased significantly from 1.024 billion yuan in 2020 to 837 million yuan, indicating that the company’s recovery of loans is in good condition.
The fixed increase will be implemented, and the raised investment projects will release the production capacity. In 2021, the total amount of non-public issuance of A-Shares was 4.298 billion yuan. Among them, China Aviation Development subscribed for the shares of the company’s non-public offering at a total price of about 928 million yuan with its 100% equity of aviation Park, 8.36% equity of Beijing aviation science and 11.85% equity of Guizhou Honglin, and the related party aviation development assets of the actual controller participated in the subscription in cash of 900 million yuan. The funds raised this time are mainly used to improve the technology of the company’s main business aero-engine control system and expand emerging industries, supplement the key scientific research and production capabilities, and continue to accelerate the construction of conditions and digital transformation.
The estimated amount of connected transactions increased significantly in 2022. The company issued the announcement on the forecast of daily connected transactions in 2022. The company expects that the total amount of daily connected transactions in 2022 will not exceed 4.47 billion yuan, an increase of 28.19% over the estimated amount in 2021 and 40.57% over the actual amount in 2021. From 2019 to 2021, the actual sales of commodities to units in the related party aviation launch system were RMB 2.129 billion, RMB 2.539 billion and RMB 3.030 billion, with growth rates of 10.95%, 19.25% and 19.34% respectively. The sales volume of daily related party transactions in 2022 is expected to rise sharply, reflecting the strong downstream demand and the company’s performance needs to be further improved.
The expectation of accelerated loading of military aircraft is strong, and policy support contributes to high growth. Aeroengine is an important part of the country and is known as the “pearl on the crown”. The country attaches great importance to the development of aeroengine industry. The aeroengine control system is the brain and nerve center of the engine, and its performance directly affects the performance of the aeroengine. Since the military reform, the company’s downstream key weapons and equipment in the fields of aviation, aerospace, electronics, weapons, shipbuilding and nuclear industry have planned large-scale and large-scale production. The upgrading of weapons and equipment has been accelerated, and the development of aeroengine and control system cannot wait. The company is in a leading position in the field of aeroengine control system in China. It provides power control system products for all military aeroengines under research and in service, including j-20. It will benefit from the drive of accelerating train assembly, upgrading of armed structure and domestic substitution, further improve the overall profitability and technical barriers, and consolidate the leading position of power control system.
The domestic substitution of civil aviation engines is imperative, and it is expected to break the performance “ceiling” for a long time. At present, civil aviation engines are mainly monopolized by the United States, Britain, France and Russia, while the development of civil aviation engines in China is in the stage of development and is gradually integrating into the world aviation industry chain. In recent years, the state has attached great importance to the development of civil aviation industry, vigorously promoted the development of domestic civil aircraft such as C919 and ARJ21, and successively carried out in-depth industrial cooperation with world-class aviation manufacturing enterprises, represented by the overall assembly production of complete aircraft. In the future, the civil aviation market has a broad space and domestic substitution is imperative. As a leading enterprise of China’s aviation power control system, the company is expected to deeply intervene in China’s civil aviation engine control system market, break the “ceiling” of performance growth and form a new performance growth point.
The recovery of international business is expected to consolidate the foundation of international cooperation. As the epidemic situation is controlled in the future, the subcontracting production of civil aircraft and aero-engine parts will continue to grow. Global aero-engine giants have a very strict screening mechanism and operation process for the selection of subcontracting suppliers, and the company has long established long-term, stable and solid cooperative relations with well-known foreign aviation enterprises such as GE, Honeywell, RORO and Safran to provide them with subcontracting production of civil aviation precision parts, such as aeroengine rocker arm Manufacturing of slide valve coupling parts and other precision parts of flight control system and fuel system. At the same time, the company has industry-leading technology and irreplaceable cost control advantages, which lays a solid technical and cost foundation for the company to benefit from the stable growth of the subcontracting market in the future.
Profit forecast and rating. In the future, the company will focus on the core business of aeroengines and derivatives, further increase R & D investment, strive to break through key technologies and optimize product structure, and the company’s core competitiveness and profitability will continue to improve. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 678 million yuan, 947 million yuan and 1259 million yuan, and EPS will be 0.52 yuan, 0.72 yuan and 0.96 yuan, corresponding to 45 times, 32 times and 24 times of PE, maintaining the “buy” rating.
Risk warning: military aircraft train loading is not as expected; The expansion of civil products business was less than expected.
