occurrences
On April 27, 2023, Wanfeng Aowei released its report for the first quarter of 2023. In Q1 2023, the company achieved operating income of 3.614 billion yuan, an increase of 3.49% over the previous year; achieved net profit of 224 million yuan, an increase of 26.94% over the previous year; and realized net profit of 200 million yuan after deducting non-return mother's net profit, an increase of 25.07% over the previous year.
Core views
The “twin engine” strategy showed results, and Q1 performance grew steadily. The company steadily promoted the development strategy of the lightweight automotive metal parts industry and the “twin engine” of the aviation aircraft manufacturing industry. In Q1 of 2023, the company achieved operating income of 3.614 billion yuan, an increase of 3.49% over the previous year; it achieved net profit of 224 million yuan, an increase of 26.94% over the previous year, and the company's performance maintained a steady growth trend. At the same time, the company has sufficient orders in hand, and subsequent growth is highly certain. As of Q1 2023, the company's contract debt was 1,017 million yuan, up 145 million yuan from the end of 2022.
Gross margin continues to rise, and debt ratios continue to be optimized. As the share of the magnesium alloy business with higher gross margin increases, the company's gross margin is expected to continue to rise. The company's gross margin in Q1 2023 was 21.40%, an increase of 1.92pct over the previous year. At the same time, the company continues to optimize its balance ratio. The company's balance ratio in Q1 2023 was 51.94%, down 2 pct from the end of 2022. As the company's balance ratio declined, the company's financial expense ratio also declined. The company's financial expense ratio in Q1 2023 was 2.02%, a year-on-year decrease of 0.32pct. We believe that as the company continues to optimize its balance ratio, the company's financial expense ratio is expected to decline further, and its profitability is expected to continue to increase.
The profitability of the lightweight automotive metal parts business continues to improve, and the innovative manufacturing business of general aviation aircraft continues to open up room for growth. In terms of the automotive metal parts lightweight business, the company is on the NEV circuit, developing strategic cooperation with mainstream NEV companies, optimizing price settlement linkage mechanisms, strengthening bulk material procurement and raw material inventory control, and increasing profitability. In terms of the innovative manufacturing business of general aviation aircraft, the company is actively strategically laying out. With the development of the domestic general aviation market, the company is expected to take advantage of its technical advantages and brand awareness ahead of time.
Investment advice
The company's revenue for 2023-2025 is estimated to be 18284/203.67/22.701 billion yuan respectively, and the net profit of the mother is 99/1,182/1,334 billion yuan respectively. The corresponding EPS for 2023-2025 is 0.47/0.55/0.62 yuan/share, respectively. Based on the closing price of 6.09 yuan on April 28, 2023, the corresponding PE was 13.06/11.04/9.78 times, respectively, maintaining the “recommended” rating.
Risk warning
Macroeconomic Fluctuations; Raw Material Price Fluctuations; International Trade and Exchange Rate Fluctuations