\u3000\u3 China Vanke Co.Ltd(000002) 985 Beijing Beimo High-Tech Frictional Material Co.Ltd(002985) )
Event: the company announced on April 16 that in 2021, the revenue was 1.132 billion yuan (+ 64.91%), the net profit attributable to the parent company was 422 million yuan (+ 33.43%), the gross profit margin was 78.93% (+ 4.53pcts), and the net profit margin was 48.53% (- 1.57pcts). In 2022q1, the revenue was 368 million yuan (+ 44.73%), the net profit attributable to the parent company was 154 million yuan (+ 47.55%), the gross profit margin was 71.89% (- 1.10pcts), and the net profit margin was 49.68% (+ 0.50pcts).
Key investment points:
An important supplier of military aircraft braking system: the company is engaged in the landing gear and landing system of military and civil dual-use aerospace aircraft and the braking products of high-end equipment such as tank armored vehicles and high-speed trains. The products are widely used in key military equipment such as fighter aircraft, bomber, transport aircraft, trainer, military trade aircraft, helicopter, aerospace high-altitude aircraft and tank armored vehicles. The company's main income comes from military products, It is a national high-tech enterprise engaged in high-end equipment manufacturing in the military industry. Some products are exclusively produced and irreplaceable.
Achievements have been made in various business areas and the performance has continued to grow rapidly: in 2021, the company continued to achieve rapid growth in revenue (+ 64.91%) and net profit attributable to parent (+ 33.43%), with a compound growth rate of net profit of 40.45% in recent five years. The company's performance growth in 2021 is mainly due to the following aspects: ① the rapid growth of aircraft brake disc (auxiliary) business revenue (+ 53.31%); ② The holding subsidiary jinghanyu (holding 51%) is included in the scope of consolidated statements (the income in 2021 is 556 million yuan, an increase of 324% compared with the consolidated income in 2020; the profit is 261 million yuan, an increase of 365% compared with the consolidated profit in 2020); ③ The civil aviation business has developed steadily, and the proportion of the company's civil products business has increased (the revenue of civil products is 98 million yuan, + 190.14%; the proportion is 8.68%, + 374 PCTs). Specific business segments:
1. The brake disc business realized a revenue of 196 million yuan (+ 53.31%) and a gross profit margin of 89.76% (+ 8.55pcts). We believe that the rapid growth of revenue in the sector is due to the increase of military aircraft volume and military training, and the increase of product procurement. In addition, the company acquired Shaanxi Lantai (the enterprise with the largest and most complete PMA license for civil aviation aircraft in China), integrated the PMA qualifications of Beijing Beimo High-Tech Frictional Material Co.Ltd(002985) and many aircraft brake discs in Shaanxi Lantai, and worked hard to open the door of aviation materials supporting for airlines. The civil aviation business is expected to become an important profit growth point of the company in the future.
2. The testing and testing business achieved a revenue of 555 million yuan (+ 323.46%) and a gross profit margin of 80.76% (+ 7.82pcts). At present, it has become the business with the highest proportion of the company's revenue (49.02%), and jinghanyu has contributed more increment. Jinghanyu is the company's new consolidated business in 2020. Its business includes providing customers with services such as component screening, destructive physical analysis (DPA) and other reliability testing, involving various fields such as aviation, aerospace, electronics and national defense.
3. The revenue of aircraft brake control system and wheel business was 316 million yuan (- 23.43%), and the gross profit margin was 76.39% (+ 3.07pcts). The company will continue to develop wheel products to meet the needs of Chinese military aircraft, and further study the control algorithm based on the successfully developed aircraft all electric brake control system and adaptive brake control system, so as to meet the requirements of new aerospace vehicles in the future.
4. The landing gear business achieved a revenue of 40 million yuan, which is a new system level product. In 2021, the company realized the landing gear business income of a certain type of aircraft, and completed the leap forward transformation from parts supplier and material supplier to system supplier and overall solution provider. The revenue recognition of this business is an important achievement of the company's downstream expansion, and the business segment is also expected to achieve rapid growth.
2022q1 made a good start in the first quarter and achieved the best quarterly performance: the company achieved revenue of 368 million yuan (+ 44.73%) and net profit attributable to parent company of 154 million yuan (+ 47.55%) in 2022q1. Both revenue and profit achieved the best quarterly data. We believe that the company achieved the best quarterly data in the first quarter with Chinese New Year factors, which reflects the high outlook of the company's downstream. The company will fully benefit from the large volume of main battle equipment in the 14th five year plan.
The gross profit margin increased rapidly, resulting in the increase of expense rate: the company's gross profit margin (78.93%) increased by 4.53pcts in 2021, mainly due to the steady increase of gross profit margin in each section. At the same time, the company's brake disc business and jinghanyu business with high gross profit margin increased rapidly, and the product structure was adjusted. In terms of expenses, the company's three-year rate in 2021 (9.25%, + 2.93pcts) increased significantly, mainly due to the combined statement of jinghanyu and Shaanxi Lantai, in which the sales expenses were 39 million yuan (+ 141.42%), the management expenses were 73 million yuan (+ 95.87%), the financial expenses were - 07 million yuan (+ 32.77%) and the R & D expenses were 76 million yuan (+ 52.47%).
The demand for production tasks has increased, and the purchase has increased significantly. The company's inventory (365 million yuan) increased by 67.90% compared with the beginning of the period, including 111 million yuan (+ 51.35%) of raw materials; Notes payable and accounts payable (RMB 308 million) increased by 53.08% compared with the beginning of the period, reflecting the rapid growth of the company's preparation for production and procurement to a certain extent. At the same time, the company's contract liabilities (RMB 69 million) increased by 765968% significantly, and the downstream demand increased significantly.
The raised investment projects provide support for the company's future performance growth, and the high-speed train project may open up market space: the company's IPO funds are mainly invested in the capacity expansion construction project of aircraft wheel products and the industrialization project of high-speed train basic friction materials and brake pads. The two projects will be completed by the end of 2022, which are expected to bring revenue of 200 million yuan and 167 million yuan respectively, and contribute net profit of 69 million yuan and 58 million yuan. In recent years, while consolidating the market of military steel brake products, the company has further explored and developed the market space of high-speed railway brake pads. By building an internationally advanced high-speed rail brake production line, expanding production capacity and developing multiple models of high-speed rail brake products will bring new profit growth points to the company.
The subsidiary jinghanyu plans to be split and listed: the company announced the proposal on Authorizing the company's management to start the preliminary preparations for the domestic listing of the split subsidiary on January 25, 2022. In order to further promote the overall development of the company's business and broaden the company's financing channels, the company started the preliminary preparations for the split and listing of jinghanyu.
Investment suggestions: ① the company's brake products are consumables with a certain service life and replacement cycle, or fully benefit from the large capacity of main battle equipment; ② The number of actual combat exercises of our army has increased, and the replacement and maintenance cycle of wheel and brake disc consumables may be shortened, which may directly benefit the company's products and incorporated maintenance business; ③ The company recognized the income of landing gear products, and the supporting level was significantly improved; ④ The layout of civil aviation, high-speed trains and other civil products business is expected to further expand the company's business scale. We estimate that the company's operating revenue from 2022 to 2024 will be 1.456 billion yuan, 1.869 billion yuan and 2.232 billion yuan respectively, the net profit attributable to the parent company will be 605 million yuan, 790 million yuan and 962 million yuan respectively, and the EPS will be 237 million yuan, 309 million yuan and 377 million yuan respectively. We maintain the "buy" rating, with a target price of 95.00 yuan, corresponding to 40 times, 31 times and 25 times of the predicted EPS from 2022 to 2024.
Risk tips: military orders are not as expected, the expansion of civilian products is not smooth, prices fluctuate sharply, epidemics are repeated, etc.
