\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 893 Aecc Aviation Power Co Ltd(600893) )
Revenue growth was in line with expectations, and gross profit margin declined. The company released its annual report for 2021, with a total revenue of 34.1 billion yuan, a year-on-year increase of + 19.1%, including 31.89 billion yuan from aeroengine and derivatives business, a year-on-year increase of + 21.9%. The net profit attributable to the parent company was 1.19 billion, a year-on-year increase of + 3.6%. The gross profit margin of the company’s sales was 12.5%, year-on-year -2.5pct, and the net profit margin of sales was 3.6%, year-on-year -0.5pct, mainly due to the adjustment of the company’s product structure and the increase of the proportion of new products during the reporting period.
Sales expenses have increased significantly, and after-sales support tasks have increased significantly. During the reporting period, the company’s sales expense was 480 million yuan, a year-on-year increase of + 59.9%, mainly due to the increase of after-sales support tasks and the increase of sales service fee; The management fee was 1.88 billion yuan, a year-on-year increase of + 12.4%, mainly due to the reduction of social security relief and the increase of employee compensation; The R & D cost was 470 million yuan, a year-on-year increase of + 5.8%, mainly due to the increase of R & D tasks of self funded projects; The financial expense was RMB 70 million, with a year-on-year increase of – 76.1%, mainly due to the increase in advance payment from customers, abundant cash flow, increase in interest income and decrease in interest expenditure.
The contract liabilities at the end of the period were 21.75 billion yuan, which was still at a high level. The amount of contract liabilities of the company at the end of the period increased by 675.3% compared with the amount at the end of the previous period, mainly due to the increase in advance payment received from customers. Sufficient funds will ensure the development of new models of the company, and also reflect the good order situation of the company. At the end of the period, the company’s advance payment amounted to 2.75 billion yuan, an increase of 446.8% over the end of the previous period, mainly due to the payment of advance payment for supporting unit contracts, indicating that the company is in the stage of active production and goods preparation.
The growth rate of Liyang company is fast, and the promotion of batch production in the third generation is progressing smoothly. Liming company achieved revenue (18.635 billion yuan, + 17.05%) and total profit (563 million yuan, + 18.17%), including revenue from aviation development and derivatives business (18.12 billion yuan, + 17.53%); Nanfang company achieved revenue (RMB 8.031 billion, + 11.7%) and total profit (RMB 316 million, – 9.02%), including revenue from aviation development and derivatives business (RMB 7.758 billion, + 11.06%); Liyang company achieved revenue (RMB 3.02 billion, + 33.22%) and total profit (RMB 57 million, – 36.67%), including revenue from aviation development and derivatives business (RMB 2.916 billion, + 35.72%). According to the company’s announcement last year, Guizhou Liyang company’s “third generation medium thrust aeroengine production line construction project” passed the completion acceptance, filling the gap of China’s medium thrust aeroengine, and the overall development level of Liyang company has completed the transformation and upgrading from the second generation to the third generation. From the perspective of the revenue growth of subsidiaries, the aviation development and derivatives business of Liyang company is growing rapidly, the batch production of models is progressing smoothly, and the performance of the company may continue to grow with the large volume of downstream military aircraft.
The new model number is gradually in large quantities, waiting for the improvement of the profit side. Many models in production of the company are in the early stage of batch production, and there is great room to improve the process maturity and yield (such as machining yield, turbine blade casting yield, etc.), at the same time, the new model has a high frequency of return to factory maintenance and field technical support in the early stage of batch production. In the future, with the scale benefits brought by the increase of delivery and the gradual maturity of production technology, the company will have a great improvement on the cost side and expense side, and the profit margin will continue to improve. At present, military aircraft are in the stage of mass production and fast delivery, and the company has strong demand for military aeroengine products. At the same time, as a consumable, under the background of military training and war preparation, the demand for Aeroengines will further expand, the back-end maintenance market will also grow steadily, and the company has a large growth space in the future.
Profit forecast: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 1.448 billion yuan, 1.92 billion yuan and 2.549 billion yuan respectively, and EPS will be 0.54 yuan, 0.72 yuan and 0.96 yuan respectively, with corresponding valuations of 72x, 54x and 41x. Considering the high prosperity of the aviation development track during the 14th Five Year Plan period, the company, as the leader in the aviation development field, has obvious advantages in its core card position. The company is given a PE valuation of 85 ~ 95 times in 2022, with a corresponding price range of 45.90 ~ 51.30 yuan, maintaining the “recommended” rating of the company.
Risk tip: product R & D and delivery are not as expected, upstream costs increase, and downstream demand slows down.
