Aecc Aviation Power Co Ltd(600893) released the annual report of 2021, realizing an operating revenue of 34.1 billion yuan in 2021, a year-on-year increase of + 19.1%; The net profit attributable to the parent company was 1.188 billion yuan, a year-on-year increase of + 3.6%. In 2021, the company steadily completed various business plans, with the main business income of aeroengine and derivatives of 31.88 billion yuan, a year-on-year increase of + 21.9%, and 106.7% of the budgeted value. In 2022, it is expected to achieve an operating revenue of 38.43 billion yuan, an increase of 20.7% over the budget of 2021 and 12.7% over the actual revenue of 2021; Previously, the company announced the plan of related party transactions in 2022, and the amount of related party transactions in 2022 is expected to increase by 30.5% compared with 2021. It is expected that the high view of the flight track will continue and be conducted orderly to the upstream and midstream, which will drive the whole industrial chain.
In terms of the four main engine plants, the parent companies, Xi’an Airlines Group and Liyang power, had higher revenue growth in 2021, accounting for 42.3% and 33.2% respectively; The revenue growth of Liming company and Nanfang company were 17% and 11.7% respectively. On the profit side, the total profit of Liming company increased by 18.2% in 2021, from 480 million in 2020 to 550 million yuan; The total profits of Liyang power, China Western Airlines Group and China Southern decreased by 36.7%, 20.5% and 9% respectively. On the whole, the demand for Aeroengine products and the number of products delivered will increase in 2021; However, due to the adjustment of product structure and the increase of the proportion of new products, the gross profit margin has decreased and the profit side is under pressure. In the future, with the batch production of new products, the increase of product value and the superposition of scale effect, the profitability is expected to improve.
The boom expansion of the industrial chain is conducted in an orderly manner, and the value of sector stabilization and allocation is highlighted. Under the influence of market sentiment and other factors, the military industry sector experienced a sharp correction at the beginning of the year, and the logic of long-term boom expansion remained unchanged. The verification of advances received by downstream enterprises and the landing of large orders will be conducted in an orderly manner to the upstream and midstream along the industrial chain. During the “14th five year plan” period, the demand of supporting enterprises is highly deterministic. The CSI military industry index is valued at 56 times, which is at the 11% quantile value of historical PE. It continues to be optimistic about the value of sector allocation under the current position.
Grasp the main line of aviation equipment investment, and military electronics has high independent and controllable growth. 1) The contract liabilities of the main engine factory + the verification of the advance payment, and the growth of the aviation industry chain will continue to be realized. The performance transmission is effective. From the main engine plant and engine system, to the body system and parts, and then to the upstream raw material sector, the whole industry chain has strong momentum and certainty. The main engine manufacturer pays attention to Avic Shenyang Aircraft Company Limited(600760) , Avic Xi’An Aircraft Industry Group Company Ltd(000768) , Jiangxi Hongdu Aviation Industry Co.Ltd(600316) , Avicopter Plc(600038) , Aecc Aviation Power Co Ltd(600893) ; The body system pays attention to Avic Electromechanical Systems Co.Ltd(002013) , China Avionics Systems Co.Ltd(600372) , Aecc Aero-Engine Control Co.Ltd(000738) , Beijing Beimo High-Tech Frictional Material Co.Ltd(002985) ; Attention to aviation forgings and parts Avic Heavy Machinery Co.Ltd(600765) , Wuxi Paike New Materials Technology Co.Ltd(605123) , Guizhou Aviation Technical Development Co.Ltd(688239) , Xi’An Triangle Defense Co.Ltd(300775) , Chengdu Ald Aviation Manufacturing Corporation(300696) ; Attention to metal materials Fushun Special Steel Co.Ltd(600399) , Western Superconducting Technologies Co.Ltd(688122) , Baoji Titanium Industry Co.Ltd(600456) , Gaona Aero Material Co.Ltd(300034) , Jiangsu Toland Alloy Co.Ltd(300855) ; Composite materials focus on Avic Aviation High-Technology Co.Ltd(600862) , Weihai Guangwei Composites Co.Ltd(300699) , Sinofibers Technology Co.Ltd(300777) . 2) The certainty of missile weapons and equipment benefits from practical military training, and the independent and controllable military electronics in the field of high-end equipment brings high growth. Pay attention to Beijing Yuanliu Hongyuan Electronic Technology Co.Ltd(603267) , China Zhenhua (Group) Science & Technology Co.Ltd(000733) , Avic Jonhon Optronic Technology Co.Ltd(002179) , Guizhou Space Appliance Co.Ltd(002025) , Chengdu Rml Technology Co.Ltd(301050) , etc.
Risk tip: the epidemic repeatedly affects the macroeconomic environment; Equipment R & D progress and procurement progress are less than expected; Military procurement prices fell; Industry competition intensifies.
