\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 893 Aecc Aviation Power Co Ltd(600893) )
Event: the company released its 2021 annual report, and achieved an operating revenue of 34.102 billion yuan, a year-on-year increase of 19.10%; The net profit attributable to the parent company was 1.188 billion yuan, a year-on-year increase of 3.63%; The net profit deducted from non parent company was 706 million yuan, a year-on-year decrease of 19.05%.
Comments:
The revenue further focused on the related business of China aviation development, and the gross profit margin decreased due to the increase of the proportion of new products: among the company’s businesses, the core business aeroengine and derivatives business realized a revenue of 31.885 billion yuan, a year-on-year increase of 21.87%, mainly due to the increase of customer demand and product delivery; The proportion of revenue further increased to 93.5%, reflecting the company’s further focus on China aviation development related businesses. The income from foreign trade export subcontracting business was 1.292 billion yuan, a year-on-year decrease of 14.42%, mainly due to the weak demand for international civil aviation affected by the epidemic. The revenue from non aviation products and other businesses was 489 million yuan, a year-on-year decrease of 17.55%. The company’s annual comprehensive gross profit margin decreased by 2.48pct year-on-year, mainly due to the adjustment of product structure, the increase of the proportion of new products, and the decrease of 2.86pct in the gross profit margin of aeroengine and derivatives business.
During the period, the expense rate decreased and the operating cash flow improved significantly: the company’s sales expenses increased by 59.93% year-on-year, mainly due to the increase of after-sales support tasks and the increase of sales service fees; Financial expenses decreased by 76.11% year-on-year, mainly due to the abundant cash flow of the company, the increase of interest income and the decrease of interest expenditure. The overall period expense rate decreased by 1PCT year-on-year. Cash flow from operating activities increased by 362.90% year-on-year, mainly due to the increase in advances received from customers.
Orders are sufficient, production is actively prepared, and revenue and profits are expected to achieve sustained growth: the company’s monetary capital increased by 96.94% year-on-year, and contract liabilities increased by 675.34% year-on-year, mainly due to the receipt of advance payment from customers, reflecting the state of sufficient orders due to strong downstream demand. Accounts receivable increased by 58.07% year-on-year due to the increase in sales revenue and a certain lag in collection. Prepayments increased by 446.79%, mainly due to the increase of prepayments paid by the company to supporting units, reflecting the company’s active production preparation. Under the background of the continuous strengthening of China’s national defense construction and the continuous improvement of aeroengine performance and localization level, the company’s revenue and profit are expected to achieve sustained growth.
Profit forecast, valuation and rating: the company has full orders and is actively preparing for production. At present, in order to improve the overall performance level of China’s aeroengine products, there are many new and improved models, which may affect the company’s gross profit margin. The company lowered its profit forecast from 2022 to 2023 by 16.33% / 13.55% to 1.402 billion yuan / 1.742 billion yuan, and predicted a profit of 2.095 billion yuan in 2024, EPS of 0.53/0.65/0.79 yuan in 2022 to 2024, and the corresponding PE of the current stock price is 75 / 60 / 50x respectively. Driven by the needs of Upgrading Chinese fighter planes and domestic replacement of engines, the company’s future development can be optimistic for a long time. Maintain the company’s “overweight” rating.
Risk warning: the risk that the speed of technological innovation is lower than expected; The risk of market competition leading to the decline of dominant position; Risk of international business affected by Sino US trade friction and covid-19 epidemic.
