\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 68 Avic Xi’An Aircraft Industry Group Company Ltd(000768) )
Key investment points
In the first quarter of 2022, the net profit deducted from non parent company increased by 43% year-on-year
1) the first quarter of 2021: the company achieved a revenue of 7.5 billion, a year-on-year increase of 12%, a net profit attributable to the parent company of 160 million, a year-on-year increase of 14%, and a net profit deducted of 150 million, a year-on-year increase of 43%.
2) the growth rate of non net profit deduction significantly exceeded the growth rate of net profit, which was due to the investment income generated by the sale of 100% equity of Xifei technology in the same period last year, resulting in an increase of about 26 million in non recurring profits and losses in the same period last year compared with the first quarter of 2022.
3) profitability: the gross profit margin of 2022q1 was 8.1%, with a year-on-year increase of 1.1pct; The net interest rate was 2.1%, basically unchanged year-on-year. The gross profit margin increased but the net profit margin was flat, mainly due to the significant year-on-year increase in financial expenses and the decrease in net investment income. It is expected that the financial expenses will be significantly reduced after the large advance payment is received.
4) expense rate during the period: the sales expense rate in 2022q1 is 1.2%, with a year-on-year decrease of 0.5pct; The rate of administrative expenses was 2.2%, with a year-on-year decrease of 0.4pct; The R & D expense ratio was 0.9%, with a year-on-year increase of 0.5pct; The financial expense ratio was 0.7%, with a year-on-year increase of 1.2pct.
The company previously raised the deposit limit of related party transactions to 75 billion yuan, or made large advances to the account
1) previously, the company raised the deposit limit of related party transactions from 14 billion to 75 billion: Avic Shenyang Aircraft Company Limited(600760) , Aecc Aviation Power Co Ltd(600893) and other aircraft engines raised the deposit limit of related party transactions in 2021, and there were large contract liabilities in the subsequent financial reports. Therefore, it is estimated that the company is also expected to reap large contract liabilities and large quantities of important products.
2) from the absolute value and growth rate of deposit limit, we judge that the future order scale of the company is expected to exceed expectations: the increase rate this time is up to 61 billion yuan. We calculate that assuming that the advance payment accounts for 50% of the contract orders, the upper limit of the contract that the company may increase in the future may be nearly 120 billion yuan.
The company is the only platform for military large and medium-sized aircraft, with high production and marketing scale and strong growth certainty in the future. Transport aircraft: Transport 20 is still in the initial stage, and can be modified to produce series special aircraft; Bombers: H-6 is the only bomber at present, and the estimated volume and price of the next generation of war bombers are both high; Special aircraft: the demand for special aircraft is strong under the trend of information war / systematic operation; Civil aircraft: in the next 20 years, the market scale of civil aircraft body parts is about 2.4 trillion, with an average annual growth rate of 120 billion and a compound growth rate of 7%. The company’s manufacturing volume accounts for more than 50% of the two main models of ARJ21 / C919.
Avic Xi’An Aircraft Industry Group Company Ltd(000768) : the compound growth rate of performance in the next three years is expected to exceed 40%
It is estimated that from 2022 to 2024, the net profit attributable to the parent company will be 980 / 1430 / 1.92 billion, with a year-on-year increase of 50% / 46% / 34%, EPS of 0.35/0.52/0.69 yuan, PE of 57 / 39 / 29 times and PS of 1.5 / 1.2 / 1.0 times. The company’s PS valuation is low in the whole machine factory. Considering the high degree of certainty of the company and the elasticity of profit margin in the next few years, continue to recommend.
Risk warning: the delivery progress of the company’s products is less than expected; The progress of relevant reform measures was less than expected.
