occurrences
The company released its 2021 annual report, achieving annual revenue of 1,132 million yuan, an increase of 64.91% over the previous year; Guimu's net profit was 422 million yuan, an increase of 33.43% over the previous year.
The company released its first-quarter report, achieving revenue of 368 million yuan, an increase of 44.73% over the previous year, and the net profit of the mother was 154 million yuan, an increase of 47.55% over the previous year.
Brief review
Revenue increased significantly in '21, and 22Q1 performance continued to grow at a high level. Throughout 2021, the company achieved operating income of 1,132 million yuan (+64.91%) and net profit of 422 million yuan (+33.43%) from its mother, a remarkable growth rate. Among them, military revenue was 1,034 million yuan (+58.40%), accounting for 91.32%; civilian goods revenue was 98 million yuan (+190.14%), accounting for 8.68%. By product, aircraft brake control systems and wheels achieved revenue of 316 million yuan (-23.43%), brake disc (spare) revenue of 196 million yuan (+53.31%), inspection and inspection revenue of 555 million yuan (+323.46%), and landing gear revenue of 40 million yuan (revenue achieved for the first time). In addition, the company achieved revenue of 368 million yuan (+44.73%) in 22Q1; Guimu's net profit was 154 million yuan (+47.55%), mainly due to increased sales revenue due to increased performance in the current period.
Looking at the balance sheet, the company's accounts receivable at the end of the period in 2021 were 1,483 million yuan, up 2.51% from the beginning of the period; advance payments were 20 million yuan, up 0.09% from the beginning of the period, and other payables were 641 million yuan, up 12.75% from the beginning of the period. Jing Hanyu received equity investment payments, which did not meet the capital confirmation conditions and included other payables; contract liabilities were 69 million yuan, up 1.71% from the beginning of the period.
Gross margin remained high and increased significantly, providing a guarantee for long-term growth in performance. In 2021, the company's overall gross profit was 78.93%, of which the gross margin of military products sales was 79.39% (+4.39pcts), and the gross margin of civilian goods sales was 74.02% (+11.05pcts).
Among them, the brake disc with the highest gross margin (89.76%) grew faster (+8.55%).
Furthermore, the expense rate for the 21-year company period was 15.96% (2.38pcts), mainly due to the merger of subsidiary Jing Hanyu. Among them, sales expenses were 39 million yuan (+141.42%), the expense ratio was 3.42% (1.08pct); management expenses were 73 million yuan (+95.87%); R&D expenses were 76 million yuan (+64.91%), and the cost rate was 6.71% (-0.55pct).
It shows that the profitability of the company's main business continues to improve, and investment in R&D continues to increase, laying the foundation for long-term growth in performance.
Shifting from component suppliers to system-level suppliers, and continuously improving supporting hierarchical companies to complete a leap forward transformation from component suppliers and material suppliers to system suppliers and overall solution providers. Based on the brake disc (pair), the company gradually expanded to the entire aircraft wheel, brake control system, and landing gear landing system, and developed in the direction of integration and intelligence. The company has the integrated advantage of being able to independently complete the design, manufacture and test verification of the entire aircraft landing system. It has achieved a leap forward transformation from a parts supplier and material supplier to a system supplier and overall solution provider, forming comprehensive competitiveness in a deep industrial chain. The advantages of system integration are obvious, and the supporting level has improved markedly. In 2021, the landing gear business contributed 404.672 million yuan for the first time. In the future, the company will continue to work hard to promote the finalization, mass production and installation of more types of aircraft landing gear products during the 14th Five-Year Plan period, and further enhance product integration and added value through the improvement of internationally leading aircraft landing system test centers, thereby increasing market share.
Continuous mergers and acquisitions of high-quality assets to expand industrial advantages
In September 2020, the company acquired 51% of the shares of Jing Hanyu, a third-party testing agency for military electronic component testing services. According to the merger of the holding subsidiary Jing Hanyu, performance increased by leaps and bounds, achieving revenue of 556 million yuan in 2021, increasing the company's performance. The company's civil aviation business is developing well. It officially acquired Shaanxi Lantai in January 2021. The company and Lantai Airlines have the most PMA qualifications. At the same time, relevant domestic policies are also increasing their support for the localization of civil aviation brake products. The company announced in January 2022 that it has officially entered the civil aviation aircraft brake disc aftermarket, pioneering the domestic replacement of carbon-carbon composite brake discs. The company will continue to integrate PMA qualifications for various aircraft brake discs from Beimo Hi-Tech and Shaanxi Lantai. It is expected that the civil aviation business will become an important profit growth point for the company in the future.
Through acquisitions, the company achieved horizontal integration of the industrial chain, further expanded the company's business in the field of civil aviation carbon brake discs, and rapidly shortened technology accumulation and market reserve time in the civil aviation field. We believe that as a core supplier in the field of braking in China, the company is entering a period of rapid development. Expanding into aircraft landing systems and recent acquisitions will help the company achieve industrial expansion and enhance long-term development potential.
Investment in scientific research continues to increase, providing a guarantee for maintaining core competitiveness The company has always attached importance to new technology research and development, and has always taken R&D as an important guarantee for maintaining the company's core competitiveness. In recent years, the company has maintained investment in technology development and research to ensure the smooth progress of technology research and development and promotion and application of achievements. In the field of braking, it has mastered the core technology with independent intellectual property rights. A number of independently innovated braking technologies and products have filled domestic gaps, broken international technology monopolies, and solved the problem of import substitution.
At the same time, the company focuses on the R&D and production capacity of the core team and has cultivated a highly competitive core management team. The company's R&D expenses in 2021 were 76 million yuan, an increase of 64.91% over the previous year. The research team already has 157 technical talents. The company has drastically increased R&D expenses, and its technical advantages in the field of braking will become more obvious. R&D capabilities are an important support for the company's performance growth, and it is expected that the company will further increase investment in scientific research in the future.
Key civilian military enterprises, product application potential can be expected
The company is mainly engaged in R&D, production and sales of landing gear landing systems for military and civilian aerospace vehicles and braking products for high-end equipment such as tank armored vehicles and high-speed trains. It is a national high-tech enterprise that manufactures high-end equipment in the military industry. It is a strategic emerging industry supported by the country, and there is a lot of room for added value in the future market. While consolidating its position in the military market, the company is vigorously expanding the market for civil aviation aircraft landing gear landing systems and high-speed train braking products, and is a key civilian military enterprise. The company's main revenue comes from military products. Its main products include aircraft brake control systems and wheels, brake discs (accessories), landing gear, and inspection tests. In recent years, the company has responded positively to the national strategy. While consolidating its position in the military market, it has vigorously broadened the market for civil aviation aircraft landing systems and high-speed train brake products. The products developed by the company have been widely used by the military and major domestic OEMs. The scope of services covers the five major war zones, and some products are exclusively produced and irreplaceable.
The company's customers cover all major OEMs in the military and aviation industries. The company's braking products are equipped with many military aircraft models, a complete range and a high level of support; the products are widely used in aerospace engineering, military engineering and weapons equipment such as aerospace, aviation, ground armaments, etc. Benefiting from the steady growth of China's national defense industry and more and more extensive applications in the civilian field, the company is expected to maintain rapid growth in the brake products market in the future.
Profit forecasting and investment ratings: The industrial layout is extended, military and civilian goods are developing collaboratively, optimistic about medium- to long-term development, and maintaining the boom in the military goods market during the “14th Five-Year Plan” rating. As a domestic manufacturer of brake and braking products for high-end equipment such as aerospace vehicle landing gear, tank armored vehicles, high-speed trains, etc., the company will fully benefit from increased demand in the downstream market, and market share will continue to increase. The company's net profit from 2022 to 2024 is estimated to be 594, 868, and 1,148 million yuan respectively, with year-on-year increases of 40.70%, 46.10%, and 32.22% respectively. The corresponding EPS from 2022 to 2024 was 2.33, 3.40, and 4.50 yuan respectively. Corresponding to the current stock price PE was 30, 20, and 15 times, respectively, maintaining the “buy” rating.
Risk warning
1. The expansion of the civil aviation market fell short of expectations
2. The delivery progress of military goods orders fell short of expectations
