In 2021, the company realized operating income of 614 million yuan, + 102.12% year-on-year, and net profit of 255 million yuan, + 86.47% over the same period last year. The company is a leading manufacturer in the field of domestic aerospace manufacturing, with the full process manufacturing capacity of aviation parts, and is expected to fully continue to benefit from the continuous rapid release of aviation equipment and the continuous expansion of civil aircraft supporting demand. at the same time, the company continues to lay out the field of intelligent manufacturing, and the growth space is expected to be further opened. With reference to the comparable company's valuation level and taking into account the broad prospects of the company's entire process layout, upgrade to the "buy" rating.

In 2021, the revenue and net profit increased rapidly, and the profit level declined. Benefiting from the rapid growth in demand for downstream aviation equipment and the continuous promotion of "small core, big cooperation" by the aviation industry group, the company achieved an operating income of 614 million yuan in 2021, + 102.12% year-on-year, and a net profit of 255 million yuan, + 86.47% over the same period last year. Or affected by the adjustment of business structure and the increase in the price of raw materials, the company's overall gross profit margin in 2021 was-12.63pcts to 56.63%. R & D expenses are + 53.99% to 16.9 million yuan compared with the same period last year, or it indicates that the company is actively carrying out new technology research and development tests; affected by transportation costs, sales expenses are + 47.53% year-on-year; financial expenses are affected by the increase in interest income from bank deposits, and financial expenses are from-279.72% to-1.27 million yuan year-on-year; management expenses are-4.22% year-on-year, making the period expense rate-4.86pcts to 6.16%. Combined with the above factors, the company's net interest rate in 2021 was-3.49pcts to 41.53% year-on-year, and its profit level declined. In the fourth quarter alone, the company realized operating income of 233 million yuan, + 96.94% compared with the same period last year, and realized net profit of 75 million yuan, + 55.76% compared with the same period last year. Or affected by the adjustment of the product structure, the overall gross profit margin of 21Q4 is-25.62pcts to 44.08% compared with the same period last year.

The release of downstream demand accelerated and 22Q1 performance also increased by 41 per cent. Fully benefiting from the accelerated release of demand from downstream mainframe factories, the company's 22Q1 realized operating income of 177 million yuan, year-on-year + 63.10%, net profit of 66 million yuan, + 40.95%, and non-return net profit of 63 million yuan, + 37.14%. Or due to the adjustment of the business structure, the company's 22Q1 gross profit margin was-10.37pcts to 52.36% year-on-year. R & D expenses are + 56.09% year-on-year, or it indicates that the company is actively expanding new product research and development; sales expenses are + 43.33% year-on-year; management expenses are-4.88% year-on-year, making the period expense rate year-on-year-3.09pcts to 3.33%. Combined with the above factors, the company's 22Q1 net interest rate was-5.87pcts to 37.32% compared with the same period last year, and the profit level declined slightly.

A substantial increase in forward-looking indicators may indicate that the business boom will continue to improve. At the end of the reporting period, the scale of the company's prepaid accounts reached 11.84 million yuan, + 393.42% compared with the beginning of the period; raw materials in inventory reached 13.72 million yuan, + 20.3% more than at the beginning of the period, or showed that the company was full of orders and was actively preparing for production; a substantial increase in forward-looking indicators may indicate that the company's business is good. At the end of 2021, the company's operating net cash flow reached 246 million yuan, compared with-24 million yuan in the same period last year. The operating net cash flow changed from negative to positive, and the cash flow situation improved significantly. At the end of 2021, the company's accounts receivable reached 436 million yuan, + 48.82% compared with the same period last year. Taking into account the good credit quality of the company's main customers and low payback risk, the company's cash flow is expected to continue to increase with the subsequent increase in payback. At the end of the reporting period, the project of the Aviation parts Intelligent Manufacturing and system Integration Center was progressing smoothly, with the project under construction reaching 65 million yuan, + 785.50% more than at the beginning of the period. as of December 31, 2021, the cumulative investment of the project has accounted for 17.25% of the total budget, and the company's performance is expected to be further enhanced after the project is landed.

Increase the layout of intelligent manufacturing to enhance the core competitiveness, the whole process capability is further enhanced. In 2021, the company completed 500 million yuan of refinancing by issuing shares to specific objects, and successfully completed the new project financing of "Aviation parts Intelligent Manufacturing Center". According to the company's annual report, the project has completed the construction of the main structure on schedule and started to purchase major equipment. After the project reaches production, it is expected to further deepen the existing business and capacity extension development, improve the intelligent manufacturing level of aviation parts, improve product performance and development quality, shorten the manufacturing cycle, and reduce manufacturing costs. The company invested in the construction of heat meter processing and non-destructive testing production line in 2017, and plans to introduce international advanced non-destructive testing, anodizing and other special process treatment procedures, and complete the investment construction in 2019 and achieve the full-line capacity of aviation parts in 2020. In 2021, the company's special process production line has established a perfect and stable management and control system, and completed the overall delivery of the fuselage section of a certain type of UAV, realizing the whole process capability upgrade from parts manufacturing to parts. At present, the company is one of the few private enterprises with special process capacity in China, and is expected to achieve long-term and rapid development by virtue of the whole process layout.

Risk factors: the growth of newly signed orders is not as expected; the development of new products is lower than expected.

Investment suggestion: the company is a leading manufacturer in the field of domestic aerospace manufacturing, with the full process manufacturing capacity of aviation parts, and is expected to fully benefit from the rapid release of aviation equipment and the continuous expansion of civil aircraft supporting demand. at the same time, the company actively layout the field of intelligent manufacturing, the growth space is expected to be further opened. We maintain the 2022 / 23 net profit forecast of 370 million yuan, the new 2024 net profit forecast is 730 million yuan, the corresponding EPS is 1.51 prime 2.13 yuan 2.98 yuan, the current price corresponding to PE is 30max 21max 15x. Select Beimo Hi-Tech, Jianghang equipment, AVIC Shenfei as comparable companies, comparable companies in 2022 Wind consensus expected PE average of 32x. With reference to the comparable company's valuation and considering the company's leading position in the aerospace manufacturing field and the prospect of the whole process layout, the company is given 40 times PE in 2022, corresponding to the target price of 60 yuan, taking into account the recent adjustment of the company's valuation level, upgraded to the "buy" rating.