\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 96 Chengdu Ald Aviation Manufacturing Corporation(300696) )
Event overview
The company released the annual report of 2021 and the report of the first quarter of 2022: in 2021, the operating revenue was 614 million yuan, a year-on-year increase of 102.12%, and the net profit attributable to the parent company was 255 million yuan, a year-on-year increase of 86.47%; In the first quarter of 2022, the operating revenue was 177 million yuan, a year-on-year increase of 63.10%, and the net profit attributable to the parent company was 66 million yuan, a year-on-year increase of 40.95%.
Analysis and judgment:
Both revenue and profit have achieved high growth, and the core benefits from the high prosperity of the industry.
In 2021, the operating revenue reached 614 million yuan, with a year-on-year increase of 102.12%; The total profit was 299 million yuan, a year-on-year increase of 79.48%; The net profit attributable to the parent company was 255 million yuan, a year-on-year increase of 86.47%; The non net profit attributable to the parent company was 249 million yuan, a year-on-year increase of 87.70%. Quarter by quarter, Q1-Q4 revenue was 108 / 1.18/1.55/233 million yuan respectively, and the net profit attributable to the parent company was 47 / 0.61/0.72/0.75 billion yuan respectively, which continued to improve month on month. We believe that with the release of new production capacity, it is expected that 2022 will also show a growth trend of “rising quarter by quarter”.
In the first quarter of 2022, the operating revenue was 177 million yuan, a year-on-year increase of 63.10%; The total profit was 76 million yuan, a year-on-year increase of 38.91%; The net profit attributable to the parent company was 66 million yuan, a year-on-year increase of 40.95%; The non net profit attributable to the parent company was 63 million yuan, a year-on-year increase of 37.14%, continuing the high growth trend of last year. We believe that, with the superposition of factors such as accelerating the installation of new aircraft, making up for the shortage in the number of military aircraft, accelerating the upgrading and upgrading, increasing the proportion of advanced fighters, successively exporting a variety of military aircraft and opening up foreign trade space, the demand for aviation equipment is strong, the relevant main engine manufacturers are facing heavy production tasks, the production rhythm is constantly improving, and the whole industrial chain needs “high-intensity rush” under the background of the continuous promotion of “small core and large cooperation”, The company is a pure manufacturer of aviation parts. In 2021, the aircraft parts business accounted for 99.94% of the operating revenue. The company has the whole process business ability of “NC precision machining, special process processing and component assembly” of aviation parts, and the core benefits from the high prosperity of the aviation industry.
The decline of comprehensive gross profit margin may be related to factors such as the transformation of business model.
In 2021, the comprehensive gross profit margin was 56.63%, a year-on-year decrease of 12.63 PCTs; In the first quarter of 2022, the comprehensive gross profit margin was 52.36%, with a year-on-year decrease of 10.31 PCTs, which was mainly due to the joint influence of factors such as the transformation of the company’s business model, product structure and price adjustment. Previously, the company mainly adopted the processing mode of incoming materials, and the main raw materials were provided by customers, so the gross profit margin was relatively high. With the development of the whole process of component assembly business of the company’s Department, the company will purchase some raw materials and related accessories by itself. We believe that the change of business mode has a certain impact on the gross profit margin level of the company, but the new business expansion will help the company expand the profit scale and improve the development ceiling of the company.
Improve quality, reduce cost and increase efficiency, improve operating efficiency, and reduce the cost rate during the period.
During 2021, the expense rate was 6.16%, with a year-on-year decrease of 4.87 PCTs. Among them, the expense rates of sales / management / R & D / finance were 0.14% / 3.48% / 2.75% / – 0.21% respectively, with a year-on-year decrease of -0.05 / – 3.86 / – 0.86 / – 0.10 PCTs respectively. During the first quarter of 2022, the expense rate was 3.33%, with a year-on-year decrease of 3.11 PCTs. Among them, the expense rates of sales / management / R & D / finance were 0.13%, 1.88%, 2.94% and – 1.62% respectively, with a year-on-year decrease of -0.02 / – 1.34 / – 0.13 / – 1.62 PCTs respectively. We believe that the company’s various expense rates have decreased, especially the management expense rate has decreased significantly, which is mainly due to the remarkable results of improving quality, reducing cost and increasing efficiency and the continuous improvement of operating efficiency. In addition, the net operating cash flow of the company in 2021 was 246 million yuan, an increase of 114024% year-on-year, mainly due to the increase in sales and collection. In the first quarter of 2022, the credit impairment loss was 124427 million yuan, with a year-on-year increase of 8.6943 million yuan, which had a certain impact on the net profit, mainly due to the increase of accounts receivable and the increase of impairment provision. We believe that the company’s accounts receivable are mainly the loans receivable from military customers. The military customers have good credit and rarely form substantive bad debts, which is expected to be offset in the future.
All businesses continued to improve.
The new capacity of precision NC machining has been released one after another, the capacity utilization rate of special process of heat meter has been steadily improved, and the delivery and settlement of component assembly business has been started. The transformation and upgrading of the whole process from part NC process to component fuselage assembly has been realized. In terms of precision NC machining, the company is the largest private supplier of a main engine factory subordinate to AVIC, and the supplier with the largest proportion of its key, important and complex parts; In terms of special process treatment, the company is one of the few private enterprises with full process capacity of special process in China. It is a special process cooperation unit designated by a main engine factory; In terms of component assembly, the company is one of the four assembly units designated by a main engine factory subordinate to AVIC, and is the first private enterprise to promote the whole process business of “raw materials – NC precision machining – special process processing – component assembly”.
Continuous optimization of customer structure.
The company’s customers cover a number of military aircraft main engine plants, civil aircraft sub contractors, scientific research institutes and aeroengine manufacturing units under AVIC. It is a class a supplier of multiple customer units and has established strategic cooperation relations with multiple customers. It is a strategic partner in the field of machining and heat treatment of a main engine plant under AVIC. In 2021, the company passed COMAC’s direct supplier capability confirmation. While stabilizing the core customer resources, the company constantly strengthens the construction of market expansion capacity: on the one hand, it continues to strengthen and consolidate the existing customer cooperation, deepen customer demand and extend the business chain; On the other hand, strengthen the business of UAV, civil aircraft, aeroengine and aerospace sectors, as well as the expansion of Chinese and international customers, so as to lay the foundation for the subsequent new capacity reserve market order.
Investment advice
In recent years, the rapid development of China’s national defense industry and the strong demand of the civil aviation market have brought about the prosperity and development of the aviation manufacturing industry. Under the background of the strategy of continuously deepening the socialization cooperation of the aviation main engine factory, the company actively carries out the cooperation and supporting of aviation parts, and speeds up the construction of the whole process business capacity of “raw materials, CNC precision machining, special process processing and component assembly”, and the performance is expected to continue to grow rapidly. Taking into account the high boom demand of the aviation parts industry, the company’s production expansion, the rhythm of capacity release, and the proper cost control in various periods, the company adjusted its operating revenue from 797 / 1116 million yuan to 982 / 1473 million yuan from 2022 to 2023, the net profit attributable to the parent company from 372 / 516 million yuan to 411 / 603 million yuan, and EPS from 160 / 2.22 yuan to 1.68/2.47 yuan. It is estimated that from 2022 to 2024, the operating revenue will be 982 / 1473 / 2063 million yuan, the net profit attributable to the parent company will be 411 / 603 / 820 million yuan, and the EPS will be 1.68/2.47/3.36 yuan respectively, corresponding to the closing price of 48.00 yuan / share on April 19, 2022, and the PE will be 29 / 19 / 14 times. Maintain buy rating.
Risk tips
The risk that the construction progress of new production capacity is less than expected; The risk of gradual reduction of gross profit margin; The risk of customers’ untimely settlement.
