Event

In 2017, the company achieved operating income of 1.854 billion yuan, an increase of 3.48% over the same period last year, and a net profit of 405 million yuan, an increase of 61.57% over the same period last year.

Comment

Military business has achieved substantial growth compared with the same period last year, and the prospect continues to be promising.

Tomorrow in 2017, Aerospace realized operating income of 1.64 billion yuan, an increase of 51.48 percent over the same period last year, and a net profit of 465 million yuan, an increase of 75 percent over the same period last year. Military business grew steadily and substantially. The agricultural machinery business lost 59 million in 2017 and may gradually divest its assets in the future. With its first-class technical advantages, tomorrow Aerospace will undertake the processing of structural parts in aviation, aerospace, engines and other fields. At present, the prosperity of the military industry continues to improve, the installation of new types of military aircraft and missile procurement have entered an accelerated period, the company's military business is expected to continue to maintain steady growth, and the prospect remains promising.

The civil aviation international subcontracting business will begin to land, and will become a new performance growth point for the company to expand the civil aviation international subcontracting business by virtue of the supporting experience and technical advantages in the military aviation field. 2018 will be the first year of the company's international subcontracting business. up to now, it has signed a "long-term agreement for the supply of aviation products" with Safeng and won the first batch of orders for spare parts worth 89.7269 million US dollars. At the same time, the company is also expected to enter the supply system of international famous aviation manufacturers such as Boeing Co, Airbus and Bombardier.

It is mainly trial parts orders in 2018, and bulk orders will be obtained in 2019, which will become a new profit growth point for the company.

Profit forecast and investment suggestion

It is estimated that the annual return net profit of the company in 2018-19-20 will be 8.74 yuan / 1.088 billion yuan, respectively, and the EPS will be 0.43 pound 0.59 yuan, respectively, and the corresponding PE will be times that of 22-16-13.

In view of the continued improvement of the military business, the international subcontracting business began to land, the company's valuation was low, and the performance growth was highly deterministic. First coverage, giving a "buy" rating risk hint

The risk of delay in military orders; the landing of international subcontracting orders is not as expected.