\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 893 Aecc Aviation Power Co Ltd(600893) )
In 2021, the revenue increased by 19% year-on-year, and the net profit attributable to the parent company increased by 3.6% year-on-year
1) for the whole year of 2021: the company achieved revenue of 34.1 billion, with a year-on-year increase of 19%, which is in line with expectations. Among them, the business income of aeroengine and derivatives is 31.9 billion, with a year-on-year increase of 22%. The delivery of aeroengine products is stable and upward. The net profit attributable to the parent company was 1.19 billion, a year-on-year increase of 3.6%, lower than expected, and the profit has yet to be further released.
2) in the fourth quarter of 2021, the revenue reached 15.8 billion, a year-on-year increase of 20%, and the net profit attributable to the parent company reached 400 million, a year-on-year decrease of 21%.
In 2021, the gross profit margin decreased by 2.5pct year-on-year and the net profit margin decreased by 0.5pct year-on-year
1) gross profit margin: the gross profit margin in 2021 was 12.5%, with a year-on-year decrease of 2.5pct, mainly due to the increase in the proportion of new products and the increase in the cost composition of direct materials, or due to the high scrap rate and rework rate of new products.
2) net interest rate: the annual net interest rate in 2021 was 3.6%, a year-on-year decrease of 0.5 percentage points. In addition to the decline in gross profit margin, the decline in net profit margin is also mainly related to the significant increase in sales expenses, which increased by 60% year-on-year, significantly higher than the growth rate of revenue, mainly due to the increase in after-sales support tasks.
3) period expense ratio: financial expenses decreased by 76% year-on-year, mainly due to the abundant cash flow under large contract liabilities and the increase of interest income. Administrative expenses increased by 12% year-on-year, mainly due to the reduction of social security expenses in 2020 and in 2021. R & D expenses increased by 5.8% year-on-year.
The balance sheet side shows that the company has full orders on hand and steady growth in business objectives
1) in the middle of 2021, the company reaped large contract liabilities. By the end of 2021, the company’s contractual liabilities (21.8 billion) remained high, indicating that the company had full orders on hand.
2) in 2021, the company exceeded 7% of the revenue target at the beginning of the year. In 2022, the company aims to achieve an operating revenue of 38.4 billion, an increase of 13% over the actual amount in 2021. Over the past three years, the company has exceeded the revenue target by an average of 8%. Therefore, it is estimated that the company is also expected to exceed the revenue target in 2022.
It is estimated that the compound growth rate of China’s aviation engine in the 14th five year plan will be nearly 20%, and the company will definitely benefit
“Military aircraft + civil aircraft + maintenance + navigation”, the slope of aeroengine industry is long and the snow is thick, and the compound growth rate of the 14th five year plan is close to 20%. The company has a complete product pedigree and covers almost all the main engine models in China. It occupies a core position in the matching of civil aircraft engines, with large growth space and strong certainty in the future.
Profit forecast and Valuation: the compound growth rate of performance in the next three years is expected to exceed 30%
It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 1.48/19.5/2.64 billion, with a year-on-year increase of 25% / 31% / 36%, 75 / 57 / 42 times of PE and 2.6 / 2.0 / 1.7 times of PS. The company’s revenue grew steadily. With the maturity and stability of new products and the improvement of reform and management of state-owned enterprises, the company has great potential to release profits in the future and maintains the “buy” rating.
Risk warning: the delivery of military orders is less than expected; The progress of model development is less than expected.
