\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. The revenue in the first quarter was 2.06 billion yuan, yoy + 15.7%; The net profit attributable to the parent company is 210 million yuan, yoy + 175.0%; Deduct 210 million yuan of non net profit, yoy + 185.5%. The performance basically meets the previous market expectations. In the first quarter, the orders of the company increased and the operating revenue increased steadily. At the same time, the cost was effectively controlled, the profit margin was improved, and the profit increased year-on-year.
Quarterly revenue has made steady progress; The profitability has entered a period of high growth. In a single quarter, 1q21 ~ 1q22 achieved: 1) revenue of 1.79 billion yuan, 2.65 billion yuan, 2.09 billion yuan, 2.27 billion yuan and 2.07 billion yuan, yoy + 34.3%, + 36.8%, + 5.5%, + 56.0% and + 15.6%. The revenue fluctuated greatly between quarters, but all achieved positive growth year-on-year, and 1q22 revenue decreased by 8.9% month on month; 2) The net profit attributable to the parent company is RMB 80 million, RMB 190 million, RMB 340 million, RMB 280 million and RMB 210 million, yoy + 88.8%, + 143.8%, + 127.8%, + 274.2%, + 175.0%. The year-on-year growth rate of performance has exceeded 100% for four consecutive quarters, and the profitability has entered a period of rapid growth.
The balance sheet reflects the high demand and prosperity; Sales receipts affect net cash flow from operations. By the end of 1q22, the company: 1) monetary capital was 5.07 billion yuan, a decrease of 17.4% over the beginning of the year; 2) Accounts receivable and bills were 6.09 billion yuan, an increase of 13.2% over the beginning of the year; 3) The advance payment was 390 million yuan, an increase of 29.1% over the beginning of the year; 4) The inventory was 3.26 billion yuan, an increase of 0.7% over the beginning of the year; 5) Contract liabilities amounted to 590 million yuan, a decrease of 28.4% over the beginning of the year. 1q22, the company: 6) the net cash flow from operating activities was - 830 million yuan (160 million yuan in the same period last year), which was caused by the year-on-year decrease in cash collection and the large amount of cash payment due in the current period when the company issued bills payable; 7) The net cash flow from investment activities was - 100 million yuan (the same period last year - 90 million yuan), which was due to the reduction in the purchase of financial products; 8) The net cash flow from financing activities was - 130 million yuan (the same period last year - 140 million yuan).
Continuously improve the ability of cost control; The level of profit margin has been significantly improved. 1q22, the company: 1) during the period, the expense rate decreased by 2.3ppt to 11.0% year-on-year. Specifically, the sales expense rate was 0.8% and decreased by 0.4ppt year-on-year; The rate of administrative expenses was 7.1%, with a year-on-year decrease of 0.7ppt; The R & D expense ratio was 2.8%, a year-on-year decrease of 0.1ppt, and the R & D expense was 57 million yuan, yoy + 10.4%; The financial expense rate was 0.4%, with a year-on-year decrease of 1.1ppt. 2) Credit impairment loss of 80 million yuan, yoy + 35.9%; 3) Non operating expenditure was 540000 yuan, yoy-48.8%. 1q22, the company's comprehensive gross profit margin was 28.6%, with a year-on-year increase of 4.1ppt; The net interest rate was 11.0%, with a year-on-year increase of 5.2ppt, and the profitability improved significantly.
Investment suggestion: as the leader of aviation forging and casting in China, the company continued to focus on its main business. The revenue of forging and casting business accounted for 74.9% in 2021, and the proportion continued to increase for four consecutive years (an increase of 9.9ppt compared with 2017). In addition, with the improvement of equipment capacity, large and complex forgings will increase the company's market share, and the company will continue to improve its profitability by adjusting its product structure. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 1.219 billion, RMB 1.617 billion and RMB 2.145 billion respectively. The current share price corresponds to PE of 31x / 23x / 18x from 2022 to 2024. Considering the continuous high prosperity of the downstream industry and the company's core position in the industry, we give 40 times PE in 2022, with EPS of 1.16 yuan / share in 2022, corresponding to the target price of 46.35 yuan. Maintain a "recommended" rating.
Risk tip: the downstream demand is less than expected, the industry competition pattern changes, and the order delivery progress is less than expected.
