\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 765 Avic Heavy Machinery Co.Ltd(600765) )
Event: the company released the first quarterly report of 2022 on April 29. In 2022q1, the company achieved an operating revenue of RMB 2.065 billion, a year-on-year increase of 15.65%, a net profit attributable to the parent of RMB 208 million, a year-on-year increase of 174.95%, and a net profit deducted from non attributable to the parent of RMB 206 million, a year-on-year increase of 185.53%.
The performance continued to grow rapidly and the profitability was significantly improved. On the revenue side, the company realized an operating revenue of RMB 2.065 billion in 2022q1, with a year-on-year increase of 15.65%; On the profit side, the company realized a net profit attributable to the parent company of 208 million yuan in 2022q1, with a year-on-year increase of 174.95%. The company's profit growth rate was significantly higher than that of revenue. First, the company's main casting and forging products were in large quantities, and the scale effect led to a significant increase in the overall profit margin. The gross profit margin in 2022q1 was 28.55%, with a year-on-year increase of 4.14pct; Second, the company achieved remarkable results in cost reduction and efficiency increase. During 2022q1, the cost rate was 11.04%, a year-on-year decrease of 2.24pct, of which the R & D cost increased by 10.39% year-on-year, and the core competitiveness is expected to be further improved. To sum up, the net interest rate of 2022q1 was 10.07%, with a year-on-year increase of 5.81pct.
The industry continues to boom, and the company actively prepares for production. In 2022q1, the contract liabilities of the company were 593 million yuan, with a year-on-year increase of 157917%. The industry continued to be booming, and the company had sufficient orders on hand; Prepayments amounted to 388 million, with a year-on-year increase of 53.25%. The company actively prepared for production, which may indicate a high boom in the industry throughout the year, and the performance is expected to continue to grow rapidly; The monetary capital was 5.065 billion yuan, with a year-on-year increase of 68.77%. The downstream demand continued to increase, and the company's cash position continued to improve.
Focus on the main business of military products and expand high-end production capacity. At present, China's advanced military aircraft and aircraft launch are in a large-scale stage. As the body structure and key parts of aircraft launch, the market prospect of military aviation forgings is broad. As the leader of China's aviation parts forging, the company focuses on the main military industry, with sufficient orders on hand and the gross profit margin is expected to increase steadily. In 2021, the company introduced large die forging equipment through fixed raising and investment, expanded the production capacity of high-end and large integrated forgings, and Guizhou anda increased the production capacity of isothermal die forgings of special materials. It is expected that after the project is completed, the main business strength of the company is expected to be further strengthened.
China's civil aviation and international subcontracting markets have opened up long-term growth space. At present, China has established a domestic civil aircraft pedigree composed of ARJ21, C919 and c929. With the accelerated mass production and delivery of domestic branch and trunk aircraft, the company, as one of the core suppliers of forgings, will expand the business scale of civil aircraft; The company has accelerated the promotion of international subcontracting business since 2015, and gradually has the strength to compete with international giants in technology and market. The international subcontracting market share is expected to increase steadily.
Investment suggestion: we estimate that the company's revenue in 202224 will be 11.512 billion yuan, 15.098 billion yuan and 18.5 billion yuan respectively, the net profit attributable to the parent company will be 1.431 billion yuan, 1.862 billion yuan and 2.424 billion yuan respectively, the corresponding EPS will be 1.36 million yuan, 1.77 million yuan and 2.30 yuan respectively, and the corresponding PE will be 26.43x, 20.31x and 15.60x respectively. The leading position of the company is stable, the profitability will continue to improve, the performance growth is expected to continue to exceed expectations, and the "buy" rating will be maintained.
Risk warning: military order fluctuation risk; The progress of international subcontracting business is less than expected; The scale effect of forging business is less than expected.
