\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 038 Avicopter Plc(600038) )
Event: on March 31, 2022, the company released its 2021 annual report. In 2021, the revenue was 21.790 billion yuan, a year-on-year increase of 10.86%, and the net profit attributable to the parent company was 913 million yuan, a year-on-year increase of 20.53%.
Key investment points
The revenue and profit increased steadily, and the amount of related procurement increased significantly in 2022. The company achieved the business plan target of 2021, with a revenue of 217.90 yuan, a year-on-year increase of 10.86%; The net profit attributable to the parent company was 913 million yuan, with a year-on-year increase of 20.53%, and the non net profit deducted was 904 million yuan, with a year-on-year increase of 22.70%. The company plans to increase the inventory reserve in 2022, and the estimated amount of related procurement increases by 23.48% compared with the actual amount in 2021, indicating that there is strong downstream demand and orders are expected to continue to increase, accelerating the release of the company’s performance.
Low altitude airspace is expected to open, and domestic civil helicopters usher in development opportunities. In 2021, Hunan Province will carry out the first nationwide pilot reform of low altitude management, and the general aviation field is expected to usher in the lifting of the policy. The company’s latest products ac313a, 7T ac352 and other models are actively obtaining evidence. Among them, ac352 has completed key flight test subjects such as alpine flight test, which is another important step from the final success. On the demand side, according to the prediction of China Aviation Industry Development Research Center, the scale of China’s civil helicopters will reach more than 3500 by 2027, while the scale of China’s civil helicopter fleet will be only 923 by the end of 2020. In addition, at present, China’s civil helicopter products are mainly foreign models, and the top three foreign manufacturers account for 77.4% of China’s market share. Under the general trend of domestic substitution, The company’s civil aircraft business has broad prospects for development, which can further enhance the company’s performance.
Benefiting from the high prosperity of the military industry, the downstream military aircraft are in rapid volume. Driven by the Centennial goal of building the army and the goal of building a modern army in 2035, the military industry has a high prosperity during the 14th Five Year Plan period. Recently, the foreign geopolitical situation is grim. In 2022, the growth rate of China’s military budget rose against the trend to 7.1%, and the growth rate of China’s military budget exceeded 7% for the first time since 2019. The downstream military aircraft are in rapid volume. The company is the only supplier of domestic helicopters, which can fully benefit from the dividends brought by the high outlook of the industry.
Profit forecast and investment rating: Based on the high prosperity of the military industry during the 14th Five Year Plan period and considering the leading position of the company in the helicopter field, we predict that the net profit attributable to the parent company from 2022 to 2024 will be 1.120/13.79/1.636 billion yuan respectively, corresponding to EPS of 1.90 yuan, 2.34 yuan and 2.78 yuan respectively, and corresponding PE of 25 / 20 / 17 times respectively. It will be covered for the first time and given a “buy” rating.
Risk tips: 1) downstream demand and order fluctuation; 2) The company’s profit is less than expected; 3) Market systemic risk.
