The company released its 2021 mid-year report. During the reporting period, the company achieved revenue of 226 million yuan, up 100.17% year on year; net profit of Fumo was 108 million yuan, up 89.85% year on year; net profit after deducting non-return mother's net profit was 106 million yuan, up 103.67% year on year; net operating cash flow inflow was 36 million yuan, net outflow for the same period last year was 53 million yuan; earnings per share were 0.46 million, up 91.67% year on year.
The aircraft parts business followed an increase in the volume of key models and entered the automotive sector during the reporting period. During the reporting period, the company's aircraft parts business achieved revenue of 226 million yuan, up 99.86% year on year, gross profit margin of 63.27%, and -14.17pct year on year, mainly due to the gradual increase in key model products, rising related expenses, and differences in settlement product structure. In addition, the company has begun the assembly business of large components for the fuselage of a certain type of drone, and undertakes the three-stage assembly business for the front, middle and rear fuselage of this model; actively promoted the construction of the entire assembly business process, further opening up the company's future growth space.
Investment in R&D has risen, operating cash flow has improved, and industry sentiment has been established. During the reporting period, the company's sales expenses were 372,300 yuan, an increase of 43.26% over the previous year, mainly due to increased sales staff remuneration and increased product logistics costs; R&D investment was 7.194 million yuan, an increase of 51.84% over the previous year. The net cash inflow from operating activities was mainly due to increased remuneration of R&D personnel and investment in R&D materials, and a net outflow of RMB 53.1043 million in the same period last year, mainly due to increased revenue and increased repayment. Considering the company's internal position in the industry chain, the company's financial report shows that the industry sentiment is rising and established.
A leader in the field of special processes in the Chengdu region, it has a remarkable comparative advantage over barriers. In terms of special processes, in 2019, the company's special process lines for non-destructive testing, anodizing, painting, chrome plating, cadmium plating, zinc nickel plating, etc. were officially put into operation. In 2020, the production capacity of the company's special process production lines was gradually released, and the full process capacity of aviation parts was completed. The company is currently the fifth and only private enterprise in Sichuan that also has Nadcap, the three major special processes of chemical treatment, heat treatment, and non-destructive testing (the remaining four are Aerofa Technology, China Aviation Chengfei, Kaitian Electronics, and Hangli Airlines). Considering that special processes have a high threshold for environmental protection and technology, the company has a significant advantage over barriers.
Profit forecast: Considering that the production value of the subsidiary Ande Technology's aviation tooling business 2021/2022/2023 in the announcement of Huawu Co., Ltd. is 4,000/7398.23/107.96646 million yuan, considering that Ande Technology and the company are also important downstream suppliers, and that Ande Technology's industry chain position is slightly advanced, it is estimated that the company's net profit for 2021/2022/2023 is 24.1/359/466 billion yuan, corresponding to PE 49.7/33.3/25.8 times, giving “Highly recommended” rating. For the detailed report, please refer to “Falcon Testing Wings, Wind and Dust - Aviation Manufacturing Series Report (1) (July 18, 2021)”
Risk warning: orders fall short of expectations, outsourcing ratio falls short of expectations, industry valuations fluctuate.