\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 893 Aecc Aviation Power Co Ltd(600893) )
Key investment points
In 2021, the revenue increased by 44% year-on-year, and the net profit attributable to the parent company increased by 93% year-on-year
1) in the first quarter of 2022, the revenue reached 5.4 billion, with a year-on-year increase of 44%, and the aviation development industry chain continued to grow at a high rate. The net profit attributable to the parent company was 66 million, a year-on-year increase of 93%, and the net profit not attributable to the parent company was 35 million, a year-on-year increase of 17%.
2) the growth rate of net profit attributable to parent company was significantly higher than that of revenue, which was mainly due to the decrease of management expense ratio, increase of investment income, decrease of financial expense ratio, decrease of fair value change loss, etc.
3) the growth rate of net profit deducted from non parent company is lower than that of net profit returned from parent company, which is mainly due to the large financial income of about 27 million in the first quarter of 2022, resulting in an increase of 25 million in non recurring income in the first quarter of 2022 compared with the first quarter of 2021. It is expected that the company will continue to benefit from the abundant cash flow brought by large advance payment in the next 2-3 years.
In the first quarter of 2022, the gross profit margin decreased by 4.8pct year-on-year and the net profit margin increased by 0.3pct year-on-year
1) gross profit margin: the gross profit margin in the first quarter of 2022 was 10.5%, a year-on-year decrease of 4.8pct, mainly due to the adjustment of product structure and the increase of the proportion of new products. Compared with the third quarter (10.7%) and the fourth quarter (10.2%) of 2021, the decline of gross profit margin caused by product structure adjustment may have been fully reflected, and it is expected to be marginal upward in the future.
2) net interest rate: the net interest rate in the first quarter of 2022 was 1.6%, an increase of 0.3 percentage points year-on-year. The decrease of gross profit margin and the basic stability of net profit margin are mainly due to the decrease of management expense rate, the increase of investment income, the decrease of financial expense rate and the decrease of loss from changes in fair value.
3) expense rate during the period: the sales expense rate increased by 0.7pct year-on-year, mainly due to the increase of after-sales support tasks; The management expense ratio decreased by 4.4pct year-on-year, and the company’s management expense ratio fluctuated greatly between quarters, which may be related to the settlement cycle of some expenses. The R & D expense ratio decreased by 0.4pct year-on-year; The financial expense ratio decreased by 0.5pct year-on-year, mainly benefiting from the abundant cash flow brought by large advance payment.
The slope of aeroengine industry is long and the snow is thick. The asset liability side shows that the company has full orders in hand,
1) “military aircraft + civil aircraft + maintenance + navigation”, the slope of aeroengine industry is long and the snow is thick, and the compound growth rate of the 14th five year plan is close to 20%. The company has a complete product pedigree and covers almost all the main engine models in China. It occupies a core position in the matching of civil aircraft engines, with large growth space and strong certainty in the future.
2) in the middle of 2021, the company reaped large contract liabilities. By the end of the first quarter of 2022, the company’s contract liabilities (21.3 billion) remained at a high level, indicating that the company had full orders on hand.
Profit forecast and Valuation: the compound growth rate of performance in the next three years is expected to exceed 30%
It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 1.48/19.5/2.64 billion, with a year-on-year increase of 25% / 31% / 36%, 68 / 52 / 38 times for PE and 2.4 / 1.8 / 1.5 times for PS. The company’s revenue grew rapidly. With the maturity and stability of new products and the improvement of reform and management of state-owned enterprises, the company has great potential to release profits in the future and maintains the “buy” rating.
Risk warning: the delivery of military orders is less than expected; The progress of model development is less than expected
