\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 893 Aecc Aviation Power Co Ltd(600893) )
Key investment points
Event: the company released its annual report for 2021 on April 8. In 2021, the company achieved an operating revenue of 34.102 billion yuan, a year-on-year increase of 19.10%, a net profit attributable to the parent company of 1.188 billion yuan, a year-on-year increase of 3.63%, and a net profit deducted from non attributable to the parent company of 706 million yuan, a year-on-year decrease of 19.05%.
Revenue increased steadily, and the proportion of new products increased, resulting in a decline in profits in the short term. On the revenue side, the company achieved a revenue of 34.102 billion yuan, 107.09% of the annual budget, and the growth rate of operating revenue reached 19.10%, the highest growth rate since 2010. In the fourth quarter alone, 2021q4 achieved an operating revenue of 15.759 billion yuan, a year-on-year increase of 19.71%, a month on month increase of 90.81%, and the delivery volume in the fourth quarter accounted for 46.21% of the whole year. On the profit side, the company realized a net profit attributable to the parent company of RMB 1.188 billion in 2021, a year-on-year increase of 3.63%, deducting a net profit not attributable to the parent company of RMB 706 million, a year-on-year decrease of 19.05%. In the fourth quarter alone, the net profit attributable to the parent company was 405 million yuan, a year-on-year decrease of 21.03%, and the net profit deducted from non attributable to the parent was 39 million yuan, a year-on-year decrease of 88.56%. The company’s annual gross profit margin was 12.49% (year-on-year -1.32pct) and 2021q4 gross profit margin was 10.23% (year-on-year -3.82pct). While the company’s revenue maintained a steady growth, the profit decreased significantly, mainly due to the expansion of the proportion of new product delivery, resulting in the decline of gross profit margin. At the same time, the after-sales guarantee cost at the initial stage of product delivery was high, resulting in the decline of net profit margin.
The main business grew rapidly, and the foreign trade business shrank due to the impact of the epidemic in the short term. In terms of products, the company’s revenue of aero-engine and derivative products was 31.885 billion yuan, with a year-on-year increase of 21.87%, and the gross profit margin was 11.95%, down 2.86pct. As the company’s main business, aero-engine maintained a relatively high revenue growth, the gross profit margin decreased, and the proportion of delivery of main new products increased. The export revenue of foreign trade was 1.292 billion yuan, a year-on-year decrease of 14.42%, and the gross profit margin was 7.65%, a decrease of 2.30pct. Due to the reduction of the scope of consolidated statements and the impact of the epidemic, the export revenue declined significantly, and the gross profit margin also declined due to the shrinkage of business scale. The revenue of non aviation products and other products was 489 million yuan, a year-on-year decrease of 17.55%, and the gross profit margin was 27%, an increase of 14.97 PCT, mainly due to the decrease of material sales revenue of industrial and trade subsidiaries and the increase of gross profit margin, mainly due to the increase of sales of some high gross profit products.
The company operates steadily and continues to increase R & D investment. In 2021, the company’s three expenses accounted for 7.16%, with a year-on-year decrease of 0.82pct. Among them, the sales expense rate increased by 0.36pct year-on-year, the management expense rate decreased by 0.33pct year-on-year, and the financial expense rate decreased by 0.86pct year-on-year. On the whole, the company’s operation remains stable. The after-sales guarantee expenses caused by the delivery of new products in 2021 are reflected in the sales expenses. The sales expenses in 2021 are 484 million yuan, with a year-on-year increase of 59.93%, and the sales expenses in 2021q4 are 253 million yuan, with a year-on-year increase of 156.79%. With the continuous optimization and improvement of the technical status of new products, it is expected to see a significant decrease in the sales expenses of the company. In 2021, the company invested 645 million yuan in R & D, with a year-on-year increase of 8.49%, and carried out 334 (year-on-year + 26.04%) key technology research. The company continued to increase R & D investment and enhance the competitiveness of products.
In hand orders are full and the operation is in good condition. The company’s operating cash flow in 2021 was 16.704 billion yuan, with a year-on-year increase of 362.90%. The company’s cash flow is in good condition. At the end of the reporting period, the company’s contractual liabilities amounted to 21.752 billion yuan, a year-on-year increase of 675.34%, indicating that the company has full and abundant orders on hand. The inventory increased by 9.45% to 20.515 billion yuan, indicating that the delivery rhythm of the company is good.
Investment suggestion: the proportion of new product delivery of the company continues to increase, which has an adverse impact on the profitability of the company in the short term. With the continuous acceleration of product maturity, the profitability is expected to recover. We lowered the company’s profit forecast. It is estimated that the company’s revenue in 20222024 will be 41.771 billion yuan, 50.980 billion yuan and 62.015 billion yuan respectively (the original value of 20222023 is 42.935 billion yuan and 52.111 billion yuan), the gross profit margin will be 11.96%, 12.37% and 12.8% respectively, and the net profit attributable to the parent company will be 1.476 billion yuan, 1.960 billion yuan and 2.940 billion yuan respectively (the original value of 20222023 is 1.988 billion yuan and 2.467 billion yuan). The aircraft engine is technically difficult and the barriers to development and production are high, As the leader of the aeroengine industry, the company has strong monopoly and scarcity in the industry and 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.
