The company issued an announcement of pre-increase in performance, and it is estimated that 2021Q3 will achieve a net profit of 94.9732 million yuan to 101.5231 million yuan, + 45% to 55% compared with the same period last year, and a deduction of 93.7441 million yuan to 100.294 million yuan in net profit, an increase of 44.51% and 54.60% over the same period last year. Benefiting from the rapid release of aviation equipment in China, the company's military business has achieved steady growth and profitability has been continuously improved. The company is the core supplier in the field of braking in China, and maintains its "buy" rating, taking into account the improving demand in the military market and the business increment that fund-raising projects and the acquisition of high-quality assets will bring to the company.

The net profit of homecoming in the first three quarters increased by 70%, 100%, and Q3 continued its high growth in a single quarter. The company issued a forecast of third-quarter results on October 10th. The company expects to benefit from the steady growth of military business and the thickening performance of Jing Hanyu and Shaanxi Lantai Airlines. In the first three quarters of 2021, the company achieved a net profit of 295 million yuan to 347 million yuan, which was + 70% of the same period last year. The net profit was 291 million yuan to 343 million yuan, which was + 72.56% and 103.46% compared with the same period last year. It is estimated that Q3 will achieve a net profit of 95 million yuan to 100 million yuan in a single quarter, which is + 45% and 55% compared with the same period last year. The company's homing net profit base was relatively high in the same period last year, with 2020Q3 + 68.32% compared with the same period last year, indicating that the company's performance was less affected by the epidemic; 2021Q3's performance still maintained rapid growth, mainly due to the full demand for the company's military business during the reporting period, rather than the low base in the same period last year. In 2021, as the opening year of the "14th five-year Plan", the company's performance continued to grow at a high rate, or confirmed that the aviation equipment industry chain has a good demeanor and a strong certainty of long-term development.

Continuous mergers and acquisitions of high-quality assets to expand industrial advantages. The company has acquired 51% of Jing Hanyu, a third-party inspection agency for military electronic components testing services, and 66.67% of Lantai Airlines, the core supplier of civil aviation brakes. According to the announcement of Shanghai Kangda Chemical New Materials Group Co., Ltd. on signing the framework agreement on equity acquisition, Jinghanyu promised in the preliminary transaction plan of batch acquisition that the performance from 2020 to 2023 would be 92 million yuan, 106 million yuan, 122 million yuan and 142 million yuan respectively, with an average annual CAGR of 17.7%. Lantai Aviation products have been equipped with various types of civil airliners. At present, China has obtained the largest and most complete PMA license for civil aviation aircraft carbon brakes. In 2019, the company achieved business income of 10.3416 million yuan and net profit of-1.0725 million yuan; 2020H1 realized operating income of 4.4559 million yuan and net profit of-960500 yuan. We believe that the company, as the core supplier in the field of braking in China, is entering a period of rapid development. Through the expansion of aircraft landing system and recent acquisitions, it will help the company to achieve industrial expansion and enhance its long-term development potential.

Driven by triple logic, the company has entered a golden period of development. The company is the core supplier in the field of braking in China, fully benefiting from the prosperity of the military and civilian market demand, we think that the company has entered the fast track of development: 1. The company's brake products have the characteristics of consumables, and the continuous promotion of practical training in our country will increase the loss of brake products, and then provide long-term demand space for the company's military business. 2. At present, the company is expanding to the aircraft landing system through pre-investment projects, in order to upgrade from parts suppliers to subsystem manufacturers, and then enhance its competitiveness in the field of landing system; 3. Lantai Airlines, it will help it gradually expand to domestic and foreign civil markets and obtain more room for development.

Risk factors: the volume of military orders is not as expected; the progress of equipment arrangement is not as expected; and the development of civilian products is not as expected.

Investment suggestion: the company is the core supplier in the field of braking in China, and we expect the company to fully benefit from the rapid release of military aviation equipment and the continuous expansion of civilian demand in the future. Taking into account the rapid growth of the company's military orders, the company's annual net profit in 2021-22-23 is forecast to be 52Universe 1.02 billion yuan, and the current price corresponding to PE is respectively times that of 49-35-25. With reference to the comparable company's valuation, the company was given 45 times PE in 2022, with a target price of 129 yuan, maintaining a "buy" rating.