\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 038 Avicopter Plc(600038) )
Key investment points
Event: the company released the first quarterly report of 2022 on April 29. In 2022q1, the operating revenue was 1.625 billion yuan, a year-on-year decrease of 49.21%, the net profit attributable to the parent was 11 million yuan, a year-on-year decrease of 93.13%, and the net profit deducted from non attributable to the parent was 05 million yuan, a year-on-year decrease of 97.03%.
Short term performance under pressure, optimistic about the company’s long-term development. On the revenue side, the company achieved an operating revenue of 1.625 billion yuan in 2022q1, a year-on-year decrease of 49.21%. Due to the impact of epidemic factors, the delivery of some products of the company decreased year-on-year, resulting in a year-on-year decrease in operating revenue; On the profit side, the company realized a net profit attributable to the parent company of RMB 11 million in 2022q1, with a year-on-year decrease of 93.13%. The decrease in profit was greater than that of revenue, mainly due to the decline in gross profit margin. The gross profit margin of 2022q1 company was 11.17%, a year-on-year decrease of 4.21pct, or due to the change of product structure in the current period; The net interest rate was 0.69%, a year-on-year decrease of 4.43pct. We believe that the company is a leading enterprise of military helicopters in China and is expected to give priority to benefiting from the batch production of advanced helicopters. The decline in performance in the first quarter is mainly due to short-term factors and is optimistic about the long-term development of the company.
The expense rate has increased and the accounts receivable have risen sharply. During 2022q1, the company’s expense rate was 11.00%, with a year-on-year increase of 1.65 PCT, of which the R & D expense was 13 million yuan, with a year-on-year decrease of 84.21%. First, there were few self funded scientific research projects in this period. Second, the R & D expense base in the same period last year was large (85 million yuan, + 135.12%). With the gradual normalization of the company’s production and operation, the R & D investment is expected to increase. At the end of the period, the company’s accounts receivable and contract assets were 4.757 billion yuan and 1.807 billion yuan respectively, with a year-on-year increase of 125.19% and 67.82%. The net cash flow from operating activities was -1.538 billion yuan and -233 million yuan in the same period last year. As most of the company’s customers are high-quality military enterprises, the certainty of cash collection is high. With the gradual recovery of accounts receivable, the company’s cash flow is expected to improve.
In 2022, the maximum amount of related deposits increased significantly, and the downstream demand was highly uncertain. In 2022, the company’s estimated upper limit for purchasing goods and receiving labor services from related parties is 12.76 billion yuan, an increase of 96.92% over the actual amount in 2021, mainly due to the company’s plan to increase inventory reserves in 2022, indicating sufficient downstream demand. The upper limit of the company’s affiliated deposits in 2022 is expected to be 13 billion yuan, an increase of 116.67% over the upper limit in 2021, indicating that the advance collection may increase in 2022. To sum up, the company’s long-term demand is high, and the downstream performance is high.
The target of helicopter is scarce, and the military market is expected to develop rapidly. The company is a leading enterprise in China’s helicopter manufacturing industry. With a wide range of product types, strong R & D strength and large production scale, the company has formed a product pattern of “one aircraft with multiple types and series development”. Helicopters are the short board of our army’s equipment, and their quantity and structure are quite different from those of the US Army. With the increase of the proportion of national defense and military equipment expenses, the construction of army aviation and Navy and air force helicopter equipment is accelerated, and the downstream demand of the company’s products is strong. Benefiting from the release of demand for advanced models such as zhi20, the company’s performance is expected to increase rapidly.
Investment suggestion: affected by the epidemic situation, the delivery progress of the company’s products is less than expected. We reduced the revenue from 2022 to 2023 to 25.699 billion yuan and 30.967 billion yuan (the original value was 29.173 billion yuan and 35.877 billion yuan), increased the revenue of 2024 by 35.028 billion yuan, and the net profit attributable to the parent company was 1.104 billion yuan, 1.370 billion yuan and 1.628 billion yuan respectively. The corresponding EPS were 1.87 yuan, 2.32 yuan and 2.76 yuan respectively, and the corresponding PE were 22.80x, 18.38x and 15.46x respectively, The company is a leader in China’s helicopter manufacturing industry. With the coordinated development of military and civilian markets and broad market prospects, the company maintains the “buy” rating.
Risk warning: the progress of military product train loading is less than expected; The import substitution of civil helicopters is less than expected; The release progress of the company’s production capacity is less than expected; The risk that the performance forecast and valuation judgment do not meet the expectations.
