Event: on April 26, 2022, the company released its 2021 annual report and its first quarterly report in 2022. In 2021, the company realized revenue of 840 million yuan, YoY-12.8%; return net profit of 740 million yuan, YoY+2220.9%; deduction of non-return net profit of-140 million yuan, compared with 30 million yuan in the same period last year. The performance of the annual report is basically in line with market expectations. 1Q22 achieved revenue of 220 million yuan, YoY+20.2%; return net profit of 20 million yuan, YoY+132.8%; deduction of non-return net profit of 20 million yuan, YoY+1893.1%.
Quarterly revenue is more balanced; short-term factors affect management expenses. The company 2021Q1~Q4:1) realized revenue of 190 million yuan, 210 million yuan, 210 million yuan and 240 million yuan respectively, and the quarterly income was more balanced; 2) realized the net profit of 9 million yuan, 671 million yuan,-4 million yuan and 59 million yuan respectively. 3) the overall expense rate increased by 13.03ppt to 50.3% in 2021. The R & D expenditure rate is 7.1%, with an increase of 1.84ppt over the previous period, mainly invested in projects such as ARJ21, a helicopter and engine, which aims to open up civil aviation and navigation markets and improve the ability of engine in-depth maintenance and independent R & D and manufacturing of spare parts. The management expense rate was 28.0%, an increase of 9.29ppt over the previous period, mainly due to the implementation of the equity incentive plan confirmation incentive fee of 16.5 million yuan, and the atomic company Huaxin science and technology consulting service fee of 24.34 million yuan, and the increase of intangible assets amortization by 11.07 million yuan. The financial expense rate was 13.1%, an increase of 1.57ppt over the previous period. 4) the investment income is 890 million yuan, compared with 40 million yuan in the same period last year, mainly due to the introduction of investors by the subsidiary Huaxin Technology in June 2021, which led to the passive dilution of the company's equity to 33.79%. The company's investment income from cost method to equity method accounting is 880 million yuan. 5) the net cash flow of operating activities was 320 million yuan. YoY+35.2%, was mainly caused by an increase of 90.48 million yuan in cash received from the sale of goods and services over the same period last year.
Focus on core equipment development and support, aviation engineering and technical services and flight training business. In 2021, company 1) core equipment R & D, manufacturing and support revenue of 170 million yuan, YoY-35.2%, accounted for 20.7% of the total revenue.
The first "made in China" Boeing Co 737MAX full-motion flight simulator developed by the company in 2021 has passed the D-level appraisal of the Civil Aviation Administration of China and delivered to customers. Relying on the technical advantages of simulator development, the company has also developed aviation and other fields of simulation business. 2) Aeronautical engineering technology and service revenue is 410 million yuan, YoY+6.2%, accounts for 48.5% of the total revenue, the company continues to improve the maintenance depth of aircraft and ministry accessories and the development and construction of new capabilities; 3) aviation training revenue of 130 million yuan, YoY+24.0%, accounts for 15.3% of the total revenue. Kunming, Tianjin and Shenyang successfully passed the CAAC quality management system certification, maintaining and consolidating the leading position of domestic private training.
Investment suggestion: the company is the largest private enterprise in China for aircraft overhaul, maintenance of accessories of the Ministry of Aviation, and conversion of aircraft to cargo aircraft, focusing on core equipment, aviation engineering and technical services and flight training business, and the steady development of the core main industry. Flight simulator and other research and development achievements are remarkable. We estimate that the company's net profit in 2022-2024 is 72 million yuan, 100 million yuan and 141 million yuan respectively, and the current stock price corresponds to 96x/69x/49x in 2022-2024 PE. Cover for the first time, giving a "cautious recommendation" rating.
Risk tips: downstream demand is not as expected; civilian market development is not as expected.
