The automobile business is developing steadily, and the future positioning is still unclear.
The company is mainly engaged in the production of auto parts, as well as some aviation products. The company's auto parts products mainly include automobile seals, car locks, electrical switches, wipers, filters, etc., with a total income of more than 1.3 billion yuan (including equipment manufacturing) in the first half of 2012, accounting for 92% of the total revenue. The company's aviation products mainly include air-conditioning systems, fuel systems, electrical switches, etc., with an operating income of nearly 100 million yuan in the first half of 2012, accounting for 7% of the total revenue.
Car sales are expected to grow by about 4% in 2012; car demand grew by 6% in 2013 to 20.7 million vehicles, driving steady growth in the company's auto parts business. Car demand in second-and third-tier cities is expected to drive the steady growth of narrow passenger vehicle sales in 2013, with an estimated growth rate of 8%. The recovery of investment growth and macroeconomic expectations are expected to drive commercial vehicle growth back to positive growth. Overall, car demand is expected to grow by 6% in 2013, slightly higher than in 2012. The company's products and customers cover a wide range of products, including passenger vehicles and commercial vehicles, customers cover major joint ventures and independent brands, revenue and profit 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 eastward shift of the strategic focus of the United States will make the situation around China face greater uncertainty; at the same time, there is still a gap between the strength of our navy and air force compared with potential opponents, so it is necessary to further improve the strength of the air force and navy. We believe that during the 12th five-year Plan period, China's naval 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 will benefit from the rapid development of air force equipment. The development of domestic large aircraft and general aviation will enhance the market space of civil aircraft and contribute to the long-term development of the company.
The future positioning of the company is still unclear in the short term, and the follow-up capital operation still needs to be observed. The actual controller of the company is four listed companies under AVIC Tongfei, namely, AVIC heavy Machinery, Guihang shares, AVIC Sanxin and AVIC Electric Test. From the business and positioning of the above four companies, Guihang shares are more suitable to be used as the integration platform of the general aircraft plate. However, at present, the company's main business is non-aviation business, and AVIC's auto parts business is relatively scattered, involving a number of listed companies, so it is difficult to fully realize industrialization integration; at the same time, because the low-altitude opening up is still in the pilot stage, the profitability of Tongfei plate is general, and the possibility of capital operation at this stage is relatively small. Therefore, we believe that the positioning of the company's future development is still unclear in the short term, and there is great uncertainty in the follow-up process of capital operation.
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, valuation and investment rating. Taking into account the steady growth of the company's automotive business and the rapid development of aviation business, it is estimated that the company's annual EPS in 2012-13-14 is 0.40 yuan 0.43 yuan (EPS is 0.39 yuan in 2011), the current stock price is 9.94 yuan, corresponding to 2012-13-14 year PE is 25-23-21 times. Taking into account the main business of the company's auto parts and the average valuation of the comparable company, as well as the possibility of capital operation, the company is given a "hold" rating for the first time. Project / year 2009 2010 2011
