Main points of investment
The company realized 0.40 yuan of EPS in 2012, which is in line with our expectations. The company's 2012 operating income is 2.61 billion yuan (year-on-year-1.7%), with a net profit of 114 million yuan (+ 2.0%) belonging to the shareholders of the parent company. The decrease in the size of the company's report revenue is mainly due to the fact that Suzhou Huachang is no longer included in the scope of the consolidated statement from June 30, 2012 (changed to equity accounting). If this reason is excluded, the company's operating income increased by 11% in 2012. Despite the increase in labor costs and financial expenses, the company's 2012 performance increased slightly due to the increase in the company's actual operating income and the subsidiary tax rebate.
Auto demand is expected to grow by more than 10% in 2013, and the company's auto parts business is expected to maintain steady growth. Car sales reached 19.31 million in 2012 (+ 4.3 per cent compared with the same period last year), and car demand growth in 2013 is expected to exceed 10 per cent, a marked rebound from 2012. The company covers a wide range of products and customers, covering passenger vehicles and commercial vehicles, customers covering major joint ventures and independent brands, revenue and profits are expected to grow steadily.
Aviation equipment is expected to enter the peak period of upgrading, with the growth of civil aircraft demand, the company's aviation product business is expected to develop rapidly. The situation around China is facing greater uncertainty; at the same time, there is still a gap between the strength of our navy and air force compared with potential rivals, so it is necessary to further improve the strength of the air force and navy. During the 12th five-year Plan period, China's navy and air force equipment will enter the peak period of upgrading. The company's aviation products are in the domestic leading level in product technology and have been applied in major domestic model projects, which should benefit from the rapid development of air force equipment. The development of domestic large aircraft and general aviation will also enhance the market space of civil aircraft, which will help the company's long-term development.
The capital operation of AVIC continues to advance, but the company's future positioning is still unclear in the short term, and the follow-up capital operation still needs to be observed. We believe that the capital operation of the first-tier sub-sector of AVIC is expected to continue to advance. Guihang shares may become the integration platform of the general aircraft plate, but at present, the company's main business is non-aviation business, at the same time, due to the low-altitude opening up is still in the pilot stage, the profitability of Tongfei plate is general, the possibility of capital operation at this stage is relatively small, and there is greater uncertainty in the follow-up capital operation process.
Risk factors: the growth rate of military expenditure has dropped significantly, the competitiveness of the company's auto parts business has declined, and there is great uncertainty in capital operation.
Profit forecast and valuation. Considering the steady growth of the company's automobile business and the rapid development of the aviation business, the company maintains its 2013 / 14 EPS forecast of 0.43 EPS 0.48 and gives a 15-year EPS forecast of 0.50 yuan. the current stock price is 12.01 yuan, corresponding to the corresponding PE of 28-25-24. The company maintains a "hold" rating, taking into account the company's main business of auto parts and the average valuation of comparable companies, concepts related to drones of the parent company, and the possibility of capital operation.
