\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 38 Aecc Aero-Engine Control Co.Ltd(000738) )
Event: the company announced on April 27 that the operating revenue in the first quarter of 2022 was 1.21 billion yuan (+ 31.33%), and the net profit attributable to the parent company was 214 million yuan (+ 59.99%); The gross profit margin is 34.66% and the net profit margin is 17.70%.
Key investment points:
The performance is the best in the history of a single quarter, and the high boom continues
In the first quarter of 2022, the company's operating revenue was 1.21 billion yuan (+ 31.33%), and the net profit attributable to the parent company was 214 million yuan (+ 59.99%). The scale of revenue and net profit attributable to the parent company was the best in the history of a single quarter. The gross profit margin was 34.66% (-0.34pcts), which remained at a high level; The net interest rate is 17.70% (+ 2.16pcts), which is the best in the history of a single quarter. During the period, the expense rate was 12.73% (-3.74pcts), and the scale effect helped to further improve the profitability.
Contract liabilities, inventories, related party transactions and other indicators indicate that the high outlook in the downstream continues. Contract liabilities increased significantly year-on-year, and inventories remained high. By the end of the first quarter of 2022, the contract liabilities of the company were 834 million yuan (+ 948.08%), and the inventory was 1.104 billion yuan (+ 14.28%). According to the company's forecast, the amount of products and commodities sold to related parties is expected to be 4.300 billion yuan (+ 30.30%) in 2022; The company expects a revenue of 5.100 billion yuan in 2022, with a growth rate of 22.68% compared with that in 2021.
The leading enterprise of aeroengine control system has a broad market space for military and civil use
The company is one of the three listed companies under the aviation development group. Its products are mainly aeroengine control systems and derivative products. It participates in the research and production of all models in service and under research in China in an all-round way. It has industry-leading research technology and capacity. The subdivided fields belong to a monopoly position, with a market share of more than 99%.
With the implementation of major national aeroengine and gas turbine projects and the development of domestic civil aircraft, there is a huge market and business space for aeroengine control system products.
In the military field, the main sources of downstream growth include:
① some second-generation machines are upgraded, the performance of third-generation machines is improved, the localized power replacement of relevant models, and the replacement of existing engines at the end of their service life;
② the situation around China is complex, and the output of China's high-performance Third-and-a-half and fourth generation machines needs to be appropriately increased;
③ the demand for newly developed models such as transport aircraft, bombers and new shipborne aircraft is urgent, and the continuous investment in scientific research funds;
④ with the requirements of training practice, the increase of equipment use frequency, consumption and new machine maintenance promote the increase of maintenance business.
In the civil sector, the main sources of downstream growth include:
① it is planned to be equipped with the Yangtze River series engine of domestic large aircraft C919 / cr929, which is in line with the international development level of the fifth generation civil aviation engine, representing the international advanced level of civil aviation engine. As the only key mechanical and hydraulic actuator supplier of engine control system, the company's research and development is progressing smoothly at present;
② for the power control devices of turboshaft, turboprop and small turbojet turbofan engine involved in navigation power, the company continues to follow up and participate in the development. Some models such as aes100 have entered the airworthiness certification stage. With the national general aviation industry planning and the implementation of low altitude airspace reform, the demand for navigation power will increase more significantly.
Continuously promote cost reduction and efficiency increase, improve quality and efficiency; The reform of system and mechanism is expected to be implemented
The company promotes low-cost design, strengthens quality and cost reduction, and carries out full value chain cost control for batch products. At the same time, in terms of management, the company adopts downsizing methods (8216 employees at the end of 2016 and 7294 employees at the end of 2021) to promote cost reduction and efficiency increase. At the same time, the principle of "small core, large cooperation, specialization and openness" is adopted, and the proportion of outsourcing has exceeded 30%. With the continuous increase of the company's scale, the expense rate decreased significantly during the period, and the net interest rate continued to increase. Meanwhile, the company disclosed that it is optimizing and improving the equity incentive plan, which will be approved by SASAC and China Aviation Development Group. If the equity incentive is implemented, it is expected to deeply stimulate the vitality of employees and improve the overall operation efficiency of the company.
On the whole, the demand level and quantity of China's military aircraft will increase significantly in the next few years. The high-quality development guided by technological upgrading and innovation will promote the upgrading of aviation equipment, which constitutes the industry trend in the future. Driven by demand and technology, the aeroengine industry has ushered in development opportunities. As the national team and leading enterprise of China's aeroengine control system, the company will give priority to in-depth benefits.
Based on the above point of view, we estimate that the company's operating revenue from 2022 to 2024 will be 5.132 billion yuan, 6.314 billion yuan and 7.775 billion yuan respectively, the net profit attributable to the parent company will be 666 million yuan, 833 million yuan and 1.032 billion yuan respectively, and the EPS will be 0.51 yuan, 0.63 yuan and 0.78 yuan respectively. We give the target price of 31.42 yuan, corresponding to 62 times, 50 times and 40 times PE respectively.
Risk warning: the construction of scientific research and production capacity is not as expected; The epidemic continues to affect international cooperation.
