Main points of investment
Event: the company released its report for the third quarter of 2015, of which operating income was 1.409 billion yuan, up 3.87% from the same period last year, and net profit belonging to listed shareholders was 32.526 million yuan, up 22.77% from the same period last year.
Our comments on this are as follows:
The performance is in line with expectations, the company's domestic and foreign trade business is developing steadily, and the profitability of the subsidiary AVIC Harbin Axis is gradually emerging.
Domestic trade aviation and derivatives benefit from the performance growth of the subsidiary AVIC Harbin Axis and the small batch production and delivery of projects under research: 1. The performance of the company's holding subsidiary CNAC Industry Harbin Axis has increased significantly in the past two years. Sales revenue and profits have shown a good growth trend. At present, its growth level and profitability are higher than other domestic trade aviation and derivative products of the company. 2. At present, the company still has a number of projects under research, and some of them have been gradually transferred to small batch production and delivery. the development and technology transformation of these projects will bring continuous performance growth for the company.
In addition, the engine sector has become a hot spot in the market recently, and the company will fully benefit:
The establishment of the engine company is on the brink: the previous company announcement made it clear that AVIC is no longer expected to be the actual controller of the company. at the same time, two other companies related to AVIC's engine business, AVIC Power and AVIC dynamic Control, also issued similar announcements, which further confirmed our previous expectation that the state would integrate the aero-engine business and establish the National engine Company. That is to say, it is equivalent to raising the aero-engine to the same level as the aircraft. if we pay attention to it from the national level, the status of the engine will be significantly improved and its development will be strongly guaranteed.
Major engine projects are expected to be announced in the near future: similar to the relationship between large aircraft projects and Comac, we expect this engine business integration to be closely related to major engine projects. Previously, the aero-engine project, known as the "China Heart", was included in the 2015 government work report for the first time. The key projects mentioned in the annual government work report will be effectively implemented in the follow-up. Therefore, the special support policy is about to come out, and we expect that the major project will be on a scale of 100 billion yuan, and its investment cycle may be shortened to less than 10 years, or even to 5 years, and the investment intensity will be greatly increased. We expect that this scale of investment should last for 20 years or more. In the next 20 years, China's final investment in the aero-engine field may be as much as 300 billion yuan, which will bring about a rapid development and progress of the aero-engine industry. We expect major projects to be announced in the near future.
Profit forecast and investment advice: we expect the company's 2015-2017 income to be 21.58,25.79 and 3.199 billion yuan, up 9.94%, 19.53% and 24.02% over the same period last year; and the net profit of shareholders belonging to listed companies is 0.54,0.82 and 119 million yuan, up 83.97%, 50.5% and 44.98% over the same period last year, corresponding to EPS 0.16,0.25,0.36 yuan. Give the company a target price of 50-55 yuan and a "overweight" rating.
Risk tips: the release of major aero-engine projects has been delayed, the development of key aero-engine models has been slow, and the valuation of military units is on the high side.
