Event: the company released three quarterly reports for 2021. From January to September in 2021, the company realized revenue of 381 million yuan (+ 105.42%), net profit of 180 million yuan (+ 103.18%), and net profit of 177 million yuan (+ 116.71%).
The main business maintained rapid growth, and 21Q3's revenue reached a single-quarter high. 21Q1-3, the company achieved operating income of 381 million yuan (+ 105.42%), mainly due to the rapid development of aviation equipment construction demand, as well as the company's related process capacity and part of the new production capacity released one after another. In a single quarter, 21Q3 achieved revenue of 155 million yuan (+ 113.59%), a record high for a single quarter.
Although the gross profit margin decreased due to the difference in product structure, the expense rate decreased during the period, and the company's net profit margin remained at a high level. The comprehensive gross profit margin of 21Q1-3 company is 64.31% (- 4.67pct), which is mainly due to the difference in product structure. The administrative expense rate is 6.23% (- 5.85pct), the sales expense rate is 0.15% (- 0.06pct), and the financial expense rate is-0.21% (- 0.21pct). The company's 21Q1-3 net interest rate is 47.25% (- 0.52pct). Thanks to the decline in expense rates during the period, the company's net interest rate remains high. In a single quarter, 21Q3 achieved a net profit of 72 million yuan (+ 126.81%), a record high in a single quarter.
The high demand downstream continued, successfully completed the non-public offering, and accelerated the construction of production capacity. At the end of the reporting period, the company's inventory was 175 million yuan, an increase of 10.79% over the beginning of the year; the advance payment was 4.19 million yuan, an increase of 74.63% over the beginning of the year, or reflecting that the high demand downstream will continue. The company successfully completed its non-public offering in August 2021, raising 500 million yuan for the "Aviation parts Intelligent Manufacturing Center" project and supplementary liquidity. It is estimated that after reaching production, the annual production capacity of aircraft parts will be 150000 pieces (sets), sales income 234 million yuan and net profit 60 million yuan. At present, the company is actively carrying out fund-raising projects, with monetary funds of 365 million yuan at the end of the reporting period, an increase of 143.87% over the beginning of the year, and projects under construction of 44 million yuan, an increase of 502.38% over the beginning of the year, mainly for equipment procurement.
We will steadily promote the implementation of the transformation and upgrading strategy with equal emphasis on the "three legs" and constantly break through the growth curve. The company steadily implements the transformation and upgrading strategy of "tripod" focusing on precision manufacturing of key and important parts, special technology and assembly of departmental components: 1 CNC precision machining business: focusing on the construction of key, important, complex parts and small batch flexible production capacity. Xindu branch / subsidiary CNC intelligent manufacturing projects have been put into production, gradually releasing NC precision machining capacity. 2 special process business: optimize the production efficiency of relevant production lines, improve the output of each production line and capacity utilization rate; 3 parts assembly business: complete the assembly business of large parts of the fuselage of a certain type of UAV, and the task of aligning three large parts of the front fuselage, middle fuselage and rear fuselage of the aircraft, and actively promote the upgrading of the whole process capability of parts processing to large parts.
Profit forecast and investment advice. We expect the company's 2021-2023 return net profit to be 2.44 yuan 3.42 / 452 million yuan, and the PE of the previous share price (closing price on 2021-10-26) is multiple of 51-37-28. Combined with the comparable company's PE valuation, give the company 55-60 times PE valuation in 2021, the corresponding reasonable value range is 54.92-59.91 yuan, maintaining the "better than the market" rating.
Risk hint: the construction progress of the project is not as expected; the intensified competition in the industry brings the risk of price reduction.