occurrences
The company plans to raise no more than 1.5 billion yuan privately to invest in aerospace assembly plant projects, aerospace special process production line projects, and green power aviation propulsion system chassis intelligent manufacturing center projects; in addition, the company formulates profit distribution plans to effectively improve investor returns.
A fixed increase of 1.5 billion yuan to increase aerospace manufacturing, highlighting the company's broad development pattern
The company has raised 435 million yuan this time, with a total investment of 535 million yuan to build an aerospace component assembly plant to improve and upgrade the aerospace component assembly capacity to achieve a development pattern that expands from parts processing to component assembly; it plans to raise 300 million yuan to invest in aerospace special process production lines to form collaboration with existing main businesses to reduce production costs and enhance profitability and product market competitiveness; it plans to invest 765 million yuan in the Green Power Aviation Propulsion System chassis intelligent manufacturing center project to lay out a new generation of large-scale aeronautical propulsion systems. The aviation engine production industry is An emerging industry with a high entry threshold, a long business cultivation period, and great potential for market growth is expected to become a new profit growth point for the company after project construction is completed. Based on the original military structural parts processing business, the company is actively expanding the aerospace processing and assembly production process. Its profitability and market competitiveness are constantly improving, and it should enjoy a certain valuation premium.
Formulate profit distribution plans to effectively improve investor returns
From 2018 to 2020, the company's annual profit distributed in cash should not be less than 10% of the distributable profit realized in that year, and the cumulative distributed profit should not be less than 30% of the average annual distributable profit achieved in the last three years. Over the past three years, the company's cumulative dividend has reached 31.30% of the total distributable profit, giving investors a stable return on investment. As the company's international subcontracting business enters the profit stage, the company's performance will return to a rapid growth trajectory, and investors will receive more impressive dividend returns.
Profit forecasting and investment advice
Without considering the issuance of shares this time, it is estimated that the company will achieve net profit of 636/874/1,088 billion yuan respectively in 2018/19/20, EPS of 0.43/0.59/0.73, and corresponding PE of 19/14/11 times, respectively. As the military business continues to improve, the international subcontracting business has begun to be implemented. The company's valuation is low, performance growth is highly certain, and the “buy” rating is maintained.
Risk warning
The growth of the military goods business fell short of expectations; the expansion of the international subcontracting business fell short of expectations.