Incident: The company released its 2017 annual report. From January to December 2017, the company achieved operating income of 75,2.7376 million yuan, an increase of 5848.69% over the previous year; net profit attributable to shareholders of listed companies was 57.8932 million yuan, an increase of 252.20% over the previous year. The main reason for the sharp increase in the company's performance during the reporting period was due to the merger of the British Gardner company acquired in June 2017, and various government subsidies of 279.5593 million yuan, such as interest on loans generated by the acquisition of Gardner, granted by the Shuangliu District Government.
Completed the acquisition of Gardner and deepened the aviation industry chain layout. On June 12, 2017, the company completed the acquisition of 100% of the shares of Gardner Aerospace Holdings Limited in the UK. Gardner Corporation is a major multinational enterprise in the production, manufacture, assembly, maintenance and system integration of advanced aerospace components in Europe. Currently, the company is building Gardner Airlines' global flagship plant project in Xihang Port Economic Development Zone, Shuangliu District, Chengdu. With the completion of the company's acquisition and the gradual completion and commissioning of the projects under construction, it will further improve the company's aviation industry chain layout from rare precious metal raw materials, high-temperature alloys, monocrystalline turbine blades, to complete aircraft engines and drones, which is of great significance to the breakthrough in key technologies in the aviation industry and the integration of the future international aviation industry.
Leveraging the synergistic effects of various business segments, the advantages of vertical integration have been further highlighted. Since July 2013, the company has successively invested in the establishment of Chengdu Aerospace Superalloy Technology Co., Ltd., Chengdu Zhongke Aero Engine Co., Ltd., and Langxing Drone Systems Co., Ltd., to build a complete industrial chain of “rhenium elements → high temperature alloys → single crystal blades → aviation components → aero engines → large drone components”. Among them, Chengdu Aerospace Superalloy Technology Co., Ltd. undertook pre-research, research and development tasks for complex monocrystalline blades for key models in service during the reporting period, and delivered multiple batches of small-batch products for aircraft tests according to the contract and were successful; the 750-kg thrust engine developed by Chengdu Zhongke Aero Engine Co., Ltd. is still undergoing aerial platform experiments in Russia and is expected to be delivered in 2018; Langxing Drone Systems Co., Ltd. successfully completed the first flight of the world's largest cargo drone AT200 during the reporting period, and is currently applying for airworthiness certification by the China Civil Aviation Administration. We believe that the company is expected to make full use of the synergies of various business segments, and that the advantages of vertical integration in the aviation industry chain will be further highlighted.
Profit forecast and investment rating: Net profit for 2018-2020 is expected to be about 63 million yuan, 107 million yuan, 176 million yuan, EPS is 0.11 yuan, 0.19 yuan, 0.31 yuan, and corresponding PE is 173 times, 102 times, 62 times, giving a “increase in holdings” rating.
