I. Overview of events
On August 17, the company released its semi-annual report 2020, with operating income of 212 million yuan, an increase of 24.49% over the same period last year, and a net profit of 31.12 million yuan, an increase of 1721.8% over the same period last year.
II. Analysis and judgment
The China News reported a substantial increase, and the high growth rate for the whole year is expected.
2020H1, the company achieved an operating income of 212 million yuan, an increase of 24.49% over the same period last year; and a net profit of 31.12 million yuan, an increase of 1721.8% over the same period last year. The high growth rate is mainly due to the company's tax rebate income increased by 19.2 million yuan over the same period last year. In addition, the delivery of customer emergency procurement items led to an increase of 57 million yuan in airborne equipment revenue over the same period last year, and the corresponding main business profit increased. In a single quarter, Q2 achieved an operating income of 160 million yuan, an increase of 48.40% over the same period last year, and a net profit of 43.12 million yuan, an increase of 240.83% over the same period last year. The company's expense rate during the period was 41.11%, a slight decrease in 0.28pct compared with the same period last year. In terms of profit margin, the company's gross profit margin was 46.66%, down 6.56% from the same period last year to 3.13%, and increasing 2.95pct over the same period last year.
Revenue from airborne equipment has increased significantly, and a number of projects have been launched.
The development field of the company's military airborne equipment is divided into the seat center, the cabin center and the navigation center, in which the seat center is the civil and military aviation seat, the products of the cabin center include cabin products, aircraft armor, and the navigation center includes navigation, actual combat system and so on. During the reporting period, revenue from airborne equipment was 151 million yuan, an increase of 61.28% over the same period last year; gross profit margin was 48.15%, down 13.71pct from the same period last year, mainly due to a substantial increase in operating costs. At present, the increment of the company's seat business mainly comes from the new helicopter, which will show a steady growth trend in the future. In 2020, the armored business of the whole aircraft will be expanded again after 18 years; the cabin project of a certain type of military transport aircraft and the actual combat system will be ordered for the first time, and subsequent orders are expected to continue to grow.
Reached a maintenance cooperation agreement with Honeywell International Inc, along with the guarantee system is expected to increase the volume of airborne equipment maintenance is also one of the company's core business, mainly including equipment maintenance and modification, currently has CAAC, EASA, FAA, JMM and other maintenance licenses, for Boeing Co series, Airbus series, various types of regional airliners and helicopters, a total of more than 30 aircraft to provide high-quality aviation equipment maintenance services. During the reporting period, the revenue from maintenance business was 55.66 million yuan, down 0.70% from the same period last year; the gross profit margin was 44.64%, an increase of 3.30pct over the same period last year. In 2019, the company reached a strategic cooperation with Honeywell International Inc to become its authorized domestic maintenance unit, which will promote the development of the company's airborne equipment maintenance business in the future. In addition, the early continuous advance of the helicopter accompanying support system has made a major breakthrough, it will be equipped in the helicopter use units, the future is expected to continue to release capacity.
III. Investment suggestions
As the leader of domestic helicopter anti-crash seats, the cabin business is developing rapidly. With the expansion of a number of models under research, we are optimistic about the rapid development of the company. It is estimated that the EPS of the company in 2020-2022 is 0.40,0.50 and 0.62 yuan respectively, corresponding to the PE of 40X, 32X and 26x. The average valuation of the comparable company is 57X, with a "recommended" rating.
IV. Risk hints
1, the order of the actual combat system is lower than expected; 2, the promotion of the accompanying support system is slow