\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 862 Avic Aviation High-Technology Co.Ltd(600862) )
Key investment points
Event 1: the company released the first quarterly report of 2022 on April 22. In the first quarter of 2022, the company achieved a revenue of 155 million yuan, a year-on-year increase of 16.64%, a net profit attributable to the parent of 291 million yuan, a year-on-year increase of 22.74%, and a net profit deducted from non attributable to the parent of 288 million yuan, a year-on-year increase of 26.62%.
Event 2: AVIC composite materials, a subsidiary of the company, received 150 million yuan of industrial development support fund from Shunyi District People’s Government of Beijing, which was specially used for the investment and construction of follow-up plants of aviation industrial composite materials.
The aviation new materials business grew steadily, and the machine tool equipment business reduced losses year-on-year. On the revenue side, in 2022q1, the company achieved revenue of 155 million yuan, with a year-on-year increase of 16.64% and a month on month increase of 20.68%. In terms of business, the aviation new materials business achieved revenue of 134 million yuan, with a year-on-year increase of 17.11%, and the machine tool equipment business achieved revenue of 16 million yuan, with a year-on-year decrease of 36.27%. The company’s largest main aviation new materials business maintained steady growth. The machine tool equipment business was greatly affected by the epidemic, and the reduction of product delivery caused the decline of revenue. On the profit side, the company realized a net profit attributable to the parent company of 291 million yuan in 2022q1, with a year-on-year increase of 22.74%, a month on month increase of 116498%, and a net profit deducted from the non parent company of 288 million yuan, with a year-on-year increase of 26.62% and a month on month increase of 350830%. The company’s profit growth rate was relatively stable year-on-year and high month on month growth, mainly due to the large R & D expenses in 2021q4 and the small profit. In terms of business, 2022q1’s aviation new materials business realized a net profit attributable to the parent company of 309 million yuan, with a year-on-year increase of 18.52%. The machine tool equipment business realized a net profit attributable to the parent company of -0.12 billion yuan, with a year-on-year loss reduction of 1.7408 million yuan. The profit growth of aviation new materials was equally stable. The machine tool equipment business reduced its loss year-on-year due to the reduction of expenses during the epidemic.
The profitability continued to improve and the operation and management continued to be stable. In terms of profit margin, the gross profit margin of the company in 2022q1 was 37.35%, with a year-on-year increase of 2.03pct, and the net profit margin was 25.19%, with a year-on-year increase of 1.25pct. By business, the net profit margin of 2022q1 aviation new materials business was 27.25%, up 0.32pct year-on-year, and the net profit margin of machine tool equipment business was – 74.89%, down 20.37% year-on-year. The steady increase in the scale of the company’s main business aviation new materials business has led to an increase in profit margin. The shrinking scale of machine tool equipment business has led to a decline in net profit margin, and the profitability of the company as a whole has been greatly improved. In terms of period expenses, the company’s three expenses accounted for 6.12% in the first quarter of 2022, with a year-on-year decrease of 0.20pct, of which the sales expense rate, management expense rate and financial expense rate were 0.81% (year-on-year -0.07pct), 5.87% (year-on-year + 0.14pct) and -0.56% (year-on-year -0.27pct). The company’s period expenses were well controlled. In the first quarter of 2022, the R & D expenditure of the company was 13 million yuan, with a year-on-year increase of 1.85%, and the R & D expenditure rate was 1.10%, with a year-on-year decrease of 0.05pct. The R & D investment of the company remained stable and the product competitiveness was strong.
Cash flow improved significantly and there were abundant orders on hand. In the first quarter of 2022, the company’s operating cash flow was – 6.21 million yuan, an increase of 223 million yuan year-on-year, and the cash flow situation improved significantly. At the end of the first quarter of 2022, the company’s contract liabilities were 722 million yuan, with a year-on-year increase of 642.16%, indicating that the company had abundant orders on hand, and the accounts receivable were 2.270 billion yuan, with a year-on-year increase of 40.30%, mainly due to the significant increase in the sales scale of aviation composite materials of its subsidiary. The inventory was 1.377 billion yuan, a year-on-year decrease of 3.98%. The delivery of the company’s products was smooth, and the payment collection was slow due to the particularity of the military industry.
The core business of aviation composite materials has been supported by the government, and the development prospect of the company continues to be good. During the reporting period, AVIC composite materials, a subsidiary of the company, received 150 million yuan of industrial development support fund from Shunyi District People’s Government of Beijing, which was specially used for the investment and construction of follow-up plants of aviation industrial composite materials. As the core supplier of aviation composite materials in China, the company has the triple advantages of shareholders, technology and industrial scale. It is expected to continue to benefit from the large volume of domestic military aircraft and the acceleration of advanced military aircraft.
Investment suggestion: we maintain the company’s profit forecast. It is estimated that the company’s revenue from 2022 to 2024 will be 5.085/65.71/8.181 billion yuan respectively, the net profit attributable to the parent company will be 8.48/11.75/1.543 billion yuan respectively, the corresponding EPS will be 0.61/0.84/1.11 yuan respectively, and the corresponding PE will be 31.9/23.0/17.5 times respectively. China’s aviation composite material market has entered a period of rapid growth. The company’s military product strength is leading, the company actively distributes civil products, and the performance is expected to grow at a high speed, Maintain the “buy” rating.
Risk warning: the progress of military aircraft train loading is less than expected; The construction of civil aircraft project is less than expected; The transformation of machine tool business did not meet expectations; The risk that the performance forecast and valuation judgment do not meet the expectations.
