Core ideas:
Event: the company issued a performance forecast for 2021, with an estimated return net profit of 250.2708 million yuan to 259.844 million yuan, an increase of 83% to 90% over the same period last year, and a non-return net profit of 246.2708 million yuan to 25584.40 yuan, an increase of 85.35% 92.55% over the same period last year.
Comments: the growth of aviation equipment construction demand leads to the improvement of performance, and the business advantages of the whole process of aviation parts and components of the company are gradually reflected. According to the company announcement, the company expects to achieve a net profit of 250-260 million yuan in 2021, compared with 137 million yuan in the same period last year, a year-on-year growth rate of 83%. This is mainly due to the rapidly growing demand for aviation equipment construction. In addition, during the reporting period, the company continued to steadily promote various businesses, the new production capacity of precision CNC processing was released one after another, the utilization rate of special process capacity of heat meter increased steadily, and the parts assembly business began to deliver and settle accounts. The company's aviation parts business advantages are gradually reflected in the whole process. In addition, the company's net profit deducted from non-return is expected to reach 246-256 million yuan, and the impact of non-recurrent profits and losses on net profit during the reporting period is expected to be about 4 million yuan.
Core investment logic: (1) the position of the industry is prominent, the company is an important strategic partner in the mechanical processing field of a mainframe factory under AVIC Industry, and an important strategic partner in the field of mechanical processing and heat meter processing in a mainframe factory. (2) the precision manufacturing technology of aviation structural parts is leading, and the company has the full process manufacturing capability of "NC precision machining-special process processing-part assembly". New businesses such as special technology and assembly are expected to enhance the added value and supporting status of the company's products. (3) High-end equipment and civil aviation market contribute to growth, medium-and short-term core benefits from mass production of main combat equipment, and is expected to expand to other high-end aircraft and aero-engine markets based on full-process manufacturing capability. at the same time, with the improvement of the epidemic in the future, civil aviation subcontracting business may become one of its performance growth points.
Profit forecast and investment advice: we expect the results in 21-23 to be 1.06 yuan per share, 1.59 yuan per share and 2.28 yuan per share, respectively. Considering the prosperity of the downstream market demand of the company, combined with the continuous expansion of the company's new business such as special technology and component assembly, and referring to the industry valuation, the company is given a 22-year PE valuation of 45 times, corresponding to a reasonable value of 71.69 yuan per share, maintaining the "overweight" rating.
Risk tips: the development of the epidemic is higher than expected; equipment delivery batch production is low expected; policy adjustment risk and so on.