Event:
On January 8 Aecc Aviation Power Co Ltd(600893) issued an announcement on the continuous related party transactions with the actual controller and its related parties in 2022, which disclosed the estimated amount of the actual implementation of various related party transactions of Aecc Aviation Power Co Ltd(600893) company in 2021 and the expected implementation of related party transactions in 2022.
In 2021, the actual estimated amount of Aecc Aviation Power Co Ltd(600893) related party transaction sales and procurement increased by 42.56% and 34.09% respectively year-on-year, and the prosperity accelerated significantly
Aecc Aviation Power Co Ltd(600893) is an aeroengine assembly enterprise, and the prosperity degree can basically represent the prosperity of the whole aeroengine industry. In Aecc Aviation Power Co Ltd(600893) 2021, the actual estimated amount of related party transaction sales of Hangfa system and AVIC system is 2.346 billion and 14.057 billion respectively. The total actual amount of related party transaction sales is 16.403 billion, an increase of 42.56% year-on-year in 2020. In Aecc Aviation Power Co Ltd(600893) 2021, the actual estimated amount of products purchased through connected transactions of Hangfa system and AVIC system is 8.059 billion and 6.796 billion respectively. The total actual estimated amount of products purchased through connected transactions is 14.855 billion, an increase of 34.09% year-on-year in 2020. In 2021, the sales amount and purchase amount of Aecc Aviation Power Co Ltd(600893) related party transactions achieved a year-on-year high-speed growth of 34-42%, indicating that the aeroengine industry is highly prosperous.
In 2021, the difference between sales and procurement execution amount of Aecc Aviation Power Co Ltd(600893) related party transactions significantly expanded, reflecting the accelerated delivery of air launch products, and the air launch system entered the inflection point of performance release
Aecc Aviation Power Co Ltd(600893) the announcement of continuous connected transactions issued at the beginning of each year discloses the actual execution amount of connected transactions in the previous year and the expected execution in the next year. From the announcements over the years, the sales execution amount of Aecc Aviation Power Co Ltd(600893) related party transactions has increased significantly faster than the purchase execution amount since 2020, reflecting the accelerated delivery of aviation development products and the release of performance. From 2017 to 2021, the total sales execution amount of Aecc Aviation Power Co Ltd(600893) related party transactions was 6.662 billion, 8.372 billion, 8.533 billion, 11.506 billion and 16.403 billion (temporarily used), with a year-on-year increase of – 0.8%, 25.67%, 1.92%, 34.84% and 42.56%. From 2017 to 2021, Aecc Aviation Power Co Ltd(600893) related party transactions totaled 7.811 billion, 8.163 billion, 11.506 billion, 11.078 billion and 14.855 billion (for temporary use), with a year-on-year increase of 10.87%, 4.51%, 26.9%, 6.94% and 34.09%. In the past five years, the difference between sales and procurement execution was – 1149 million, 209 million, – 1826 million, 428 million and 1548 million, showing an obvious expansion trend, reflecting the accelerated delivery of aviation development products.
In 2022, it is estimated that the sales and procurement execution amount of related party transactions will increase by 25.89% and 34.63% respectively year-on-year. In 2022, the aviation development industry will have high growth and strong certainty
Aecc Aviation Power Co Ltd(600893) announced that the total estimated amount of products sold and purchased by related party transactions in 2022 was 20.65 billion yuan and 20 billion yuan respectively, with a year-on-year increase of 25.89% and 34.63% respectively in 2021. On the basis of the rapid growth in 2020 and 2021, it still maintained a high level of growth. The estimated amount of sales and procurement both exceeded 20 billion yuan, a new high since the 13th five year plan. In 2022, the demand of the aviation industry is highly deterministic and the industry will grow rapidly.
The pace of the aviation industry chain lags behind, but it has entered a good situation. The replacement of military aircraft has opened the golden age of the aviation industry chain
Aeroengine is the most difficult link in the aviation equipment industry chain, so it is also one of the most lagging links in this round of prosperity transmission. With the acceleration of military aircraft assembly, domestic aeroengines have gradually entered the substitution stage, and the prosperity of aeroengine industry is getting better and better. We believe that compared with other links of aviation equipment, the aviation engine industry is still in the early boom stage, and the future boom cycle is a long-term dimension calculated by 10 years. On the one hand, the installation of military aircraft has accelerated, and the number of aeroengines required for new installation has increased significantly. In this strategic context, domestic aeroengines must accelerate the realization of self-sufficiency, otherwise it will cause major security risks to the supply chain security of China’s military aircraft industry chain; Secondly, under the trend of taking the whole army’s war preparation as the leading strategic idea, the duration of military aircraft training and exercise has increased significantly, the attribute of aeroengine as a semi consumable has become prominent, and the stability and sustainability of demand will be greatly enhanced.
The contractual liabilities of the three major listed companies in the aeroengine industry chain disclosed in the third quarterly report of 2021 totaled 23.989 billion, a year-on-year increase of 636%. The estimated sales and procurement amount of related party transactions in 2022 disclosed by Aecc Aviation Power Co Ltd(600893) increased rapidly year-on-year (25.89% and 34.63% respectively). We believe that from various trends, the aeroengine industry chain is about to enter the golden development period, and the core targets of the industry chain deserve high attention and strategic allocation. It is recommended to focus on the core listed companies related to the main engine, core subsystems and upstream key raw materials and parts.
Risk tips: 1: the growth rate of defense expenditure budget is lower than expected; 2: The delivery of military orders is less than expected; 3: The R & D and mass production progress of new models is less than expected; 4: Major changes have taken place in the game between China and the United States.
