\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 038 Avicopter Plc(600038) )
Event: the company recently released the first quarterly report of 2022, realizing a revenue of 1.63 billion yuan, yoy-49.2%; The net profit attributable to the parent company is RMB 10 million, yoy-93.1%; Deduct the net profit not attributable to the parent company of RMB 4.761 million, yoy-97.0%. 1q22 performance is lower than market expectations. The decline in revenue and performance is mainly due to the impact of the epidemic and product structure, and the delivery of some products decreased year-on-year.
The profit margin declined and the short-term performance was under pressure. The gross profit margin of 1q22 was 11.17%, a year-on-year decrease of 4.21ppt. The net interest rate was 0.33%, with a significant year-on-year decrease of 4.62ppt. Meanwhile, the company’s expense rate during the period increased by 1.66ppt to 11.0% year-on-year. Specifically, the sales expense rate was 1.8%, with a year-on-year increase of 0.85ppt; The management fee rate was 9.1%, with a year-on-year increase of 3.25ppt; The R & D expense rate was 0.8%, a year-on-year decrease of 183 PPT, and the R & D expense was RMB 100 million, a year-on-year decrease of 84.2%, mainly due to the small number of self funded scientific research projects.
Receivables / prepayments / inventories have increased in varying degrees, or it indicates that the prosperity of the company’s industry is still high. By the end of the first quarter of 2022, the company’s 1) monetary capital was 1.89 billion yuan, a decrease of 46.3% compared with the beginning of the year, mainly due to less collection from customers; 2) Accounts receivable and bills amounted to 4.88 billion yuan, an increase of 41.2% over the beginning of the year; 3) The advance payment was 230 million yuan, a decrease of 44.2% over the beginning of the year; 4) The inventory was 14.95 billion yuan, an increase of 15.0% over the beginning of the year; 5) Contract liabilities were 2.33 billion yuan, close to the beginning of the year; 6) The net cash flow from operating activities was – 15.38 billion yuan, compared with – 230 million yuan in the same period last year, mainly due to the temporary lack of payment collection from customers.
In 2022, related party procurement and labor service acceptance are expected to increase by 97%, and the deposit limit will be raised to 13 billion yuan.
The company estimates that the transaction volume of related party procurement and labor services in 2022 will be 12.76 billion yuan, an increase of 97% over the actual amount last year; At the same time, the company raised the deposit limit to 13 billion yuan in 2022, an increase of nearly 117% year-on-year in 2021, or indicates a significant increase in the company’s future contract liabilities.
Harbin airlines and Zhongzhi Co., Ltd. plan to transfer their shares, and the holding proportion of AVIC science and industry will increase to 49.30%. On February 21, 2022, the company announced that Harbin Airlines Group plans to transfer 26.71% of the tradable shares without sale conditions and Zhongzhi Co., Ltd. plans to transfer 12.78% of the tradable shares without sale conditions to AVIC according to the net book value. After the share transfer is completed, Harbin Airlines Group and Zhongzhi Co., Ltd. no longer hold the shares of the company, and AVIC Co., Ltd. remains the controlling shareholder of the company, but the total shareholding ratio increases to 49.30%. The adjustment of the company’s equity structure may be conducive to the company’s follow-up reform progress.
Investment suggestion: the company is the main force with the largest scale, the highest output value and the most complete product series in China’s helicopter manufacturing industry. It may benefit from the rapid growth of aviation equipment demand and the accelerated development of navigation market during the 14th Five Year Plan period. We expect the net profit attributable to the parent company from 2022 to 2024 to be 1.136 billion yuan, 1.374 billion yuan and 1.655 billion yuan respectively. The current share price corresponds to 22x / 18x / 15x PE from 2022 to 2024. Considering the sustained high prosperity of the industry and the company’s core position in the industrial chain, we give the company 25 times PE in 2022, EPS of 1.93 yuan / share in 2022, corresponding to the target price of 48.25 yuan, and maintain the “recommended” rating.
Risk warning: downstream demand is lower than expected; Policy risks, etc.
