\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 967 Inner Mongolia First Machinery Group Corporation Co.Ltd(600967) )
Event: the company released the annual report of 2021 and the first quarterly report of 2022
The net profit attributable to the parent company in 2021 and 2022q1 increased by 14% and 17% year-on-year; Q1 deduction of non net profit increased by 27%, and the company achieved a revenue of 13.8 billion yuan in 2021, a year-on-year increase of 4%; The net profit attributable to the parent company was 750 million yuan, a year-on-year increase of 14%. In the first quarter of 2022, the company achieved a revenue of 2.8 billion yuan, a year-on-year increase of 47%; The net profit attributable to the parent company was 210 million yuan, a year-on-year increase of 17%; Deduct non net profit of 205 million yuan, a year-on-year increase of 27%.
In the first quarter, the revenue exceeded expectations and the net profit met expectations: the revenue growth accelerated and the profitability improved continuously
The growth rate of the company’s revenue and net profit in the first quarter was significantly faster than that in 2021. From 2019 to 2021, the year-on-year growth rates of the company’s revenue and net profit attributable to the parent were 3.4% / 4.4% / 4.4% and 7% / 15% / 14% respectively, while the year-on-year growth rates of the company’s revenue and net profit attributable to the parent increased to 47% and 17% respectively in the first quarter of 2022.
In terms of profitability, the overall gross profit margin of the company reached 10.4% in 2021, with a year-on-year increase of 0.55pct; The net interest rate reached 5.4%, a year-on-year increase of 0.46pct. On the expense side, the company’s sales / management / R & D / financial expense rates in 2021 were 0.18% / 3.32% / 3.06% / – 1.57% respectively, which was basically the same as that in the same period of last year.
The performance of foreign trade business is bright, and it is expected to usher in a simultaneous rise in volume and profit in the future
In 2021, the company’s foreign trade business achieved a revenue of 1.66 billion yuan, a significant increase of 119% year-on-year; The gross profit margin reached 19.7%, with a year-on-year increase of 7.93pct. After years of intensive cultivation, the company’s foreign trade business has gradually entered the harvest period, and is expected to usher in a simultaneous rise in volume and profit in the future.
With full orders in hand, the leading performance of army equipment will be accelerated
At the end of the first quarter of 2022, the company’s contract liabilities reached 10.35 billion yuan. We judge that the company has full orders and the annual performance is expected to speed up. As China’s only main battle tank and medium and heavy wheeled armored vehicle company, the company will continue to benefit from China’s demand for maintaining a strong army and new equipment replacement, as well as a substantial increase in foreign trade demand.
Previously, the performance evaluation conditions for the unlocking of restricted shares of the company clearly proposed that the net profit CAGR in 2021 / 2022 / 2023 should not be less than 10% and not lower than the average value of the same industry based on 2019. According to wind’s unanimous expectation, the compound growth rate of “railway, ship, aerospace and other transportation equipment” in the CSRC industry in 2021 and 2022 is 11% and 12% compared with 2019.
Underestimated value and high margin of safety: the cash on the account is 6.7 billion yuan, which is one of the defense main engine manufacturers with the lowest PE valuation
High margin of safety: there is a lot of cash on the account, and the valuation level is significantly lower than that of national defense complete machine enterprises. The PE valuation of the company is about 1 / 3 of the four major national defense complete machines ( Aecc Aviation Power Co Ltd(600893) , Avic Xi’An Aircraft Industry Group Company Ltd(000768) , Avic Shenyang Aircraft Company Limited(600760) , Jiangxi Hongdu Aviation Industry Co.Ltd(600316) ).
Investment suggestion: it is estimated that the compound growth rate of performance from 2022 to 2024 will be 20%, which will continue to be recommended
It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 880 / 10.6 / 1.29 billion respectively, with a compound growth rate of 20% and PE of 16 / 14 / 11 times. At present, the valuation is low and maintains the “buy” rating.
Risk tips:
Export demand and delivery rhythm were lower than expected, and the loading of new tanks and armored vehicles was lower than expected.
