\u3000\u3 Guocheng Mining Co.Ltd(000688) 239 Guizhou Aviation Technical Development Co.Ltd(688239) )
Event: on April 27, the company released the first quarter performance announcement. During the reporting period, the company realized an operating revenue of 312 million yuan (+ 58.24%) and a net profit attributable to the parent company of 52 million yuan (+ 59.58%).
Comments:
Aviation forging orders are sufficient, and 22q2 is expected to continue high growth. According to the annual report, the high growth of the revenue side is mainly due to the sufficient orders of customers in the downstream market of aviation and energy equipment forgings, which drives the continuous increase of sales volume. The reference company and the forging industry can the delivery rhythm of the company in the past quarter. It can be seen that the first quarter is often the low delivery season of the company. Considering the current full demand in downstream areas such as engines and aerospace special equipment, It is expected that the company's annual revenue side is expected to continue to maintain a high growth trend;
The quarter on quarter trend is upward, and the outlook for Q2 is expected to continue. The net profit attributable to the parent company of 22q1 was 52 million yuan, with a year-on-year increase of + 59.58% and a month on month increase of + 8.3%. Since the first quarter is a single delivery quarter, and considering the room for improvement at the company's capacity end and the continuous improvement of the demand for downstream models, 22q2 is expected to continue the month on month improvement trend.
The gross profit margin and net profit margin increased simultaneously, and the scale effect gradually appeared. The gross profit margin of 22q1 increased by 19.2pct to 34.68% year-on-year, which is expected to be mainly due to the increase in the proportion of military products in the delivered product structure. Referring to the annual gross profit margin of the company of 32.6% in 2021, and considering that the company's current production capacity is still in the stage of active expansion, it is expected that with the gradual release of new production capacity and the continuous upgrading of digital automation production capacity of new production lines, the scale effect is expected to continue to be realized, and the gross profit margin may still have room for improvement; The net interest rate of 22q1 increased by 0.14pct to 16.65% year-on-year, which was less than the gross profit, mainly due to the year-on-year increase of 2.4pct to 12.53% in the period expense rate.
Raise funds, invest and expand production, undertake future needs, digital transformation and improve production efficiency. The company raised 349 million yuan, of which 269 million yuan was used for the "construction project of precision manufacturing industrial park of special alloy ring rolled forgings for aeroengines and gas turbines". It plans to improve the production capacity of small and medium-sized special alloy ring rolled forgings through the construction and purchase of advanced forging processing equipment in new production areas, so as to meet the growth demand of batch production of aeroengines and overseas long-term cooperation projects. In addition, the project will implement digital transformation, build flexible automatic production lines, build a full life cycle digital management platform, reduce labor costs, and effectively shorten the product design, R & D and manufacturing cycle to meet the differentiated and personalized product needs of downstream customers. We believe that raising investment and expanding production will help the company break through the bottleneck of production capacity, and the cost reduction and efficiency increase brought by digital transformation is expected to help the company continuously improve its profitability and enhance its long-term competitiveness.
Equity incentive is bound to the core backbone, and the performance is expected to enter the stage of steady improvement. From 2011 to 2016, the company implemented equity incentive to 13 management by transferring shares / capital contribution and introducing capital increase, laying a good foundation for later development. In 2022, an equity incentive plan was issued to grant a total of 2 million shares (1.43% of the total share capital) at the price of 25 yuan / share to 150 middle and senior managers and core technicians (34.25% of the total). The target value of performance assessment granted for the first time corresponds to the non net profit attributable to the parent company from 2022 to 2024, which is 161 million yuan, 201 million yuan and 248 million yuan respectively, and the CAGR from 2021 to 2024 is 25.97%. We believe that after the equity incentive of the company gradually covers the core personnel and completes the interest binding of the core backbone, the management and operation ability of the company will be significantly improved, and the performance end is expected to enter the stage of steady improvement.
Investment suggestion: as the core supplier in the field of China Aerospace Development and Aerospace Forgings, and under the background of the gradual finalization and batch production of downstream products in service and under development, the company is currently in the transition stage from small batch and multi variety production to large-scale batch production, and the subsequent capacity release brought by the company's fund-raising projects will further improve the company's production scale. It is expected that it will be accompanied by the further realization of scale effect, Profit elasticity may gradually appear. It is estimated that the net profit attributable to the parent company from 2022 to 2023 will be RMB 199 million and RMB 281 million respectively, corresponding to the valuation of 34x and 24x. Maintain the "Buy-A" rating.
Risk warning: military orders are less than expected; Civil goods orders were less than expected.
