The company realized operating income of 1.132 billion yuan in 2021, + 64.91% year-on-year; net profit of 422 million yuan, revenue of 368 million yuan, + 44.73%, and net profit of 154 million yuan, + 47.55%, respectively. Driven by the triple logic of military demand, aircraft landing system and civil aviation materials business, the company may enter a golden period of development. In view of the improvement of the company's military orders, the continued expansion of the civilian market and the upgrading of the landing system, the company's "buy" rating is maintained.
In the past 21 years, revenue and net profit has increased rapidly, and the profit level has declined slightly. Benefiting from the rapid growth of military business, the company achieved operating income of 1.132 billion yuan in 2021, + 64.91% year-on-year, of which military revenue was 1.034 billion yuan, + 58.40% year-on-year; and net profit was 422 million yuan, + 33.43%. According to the analysis of various products, the brake disc business is growing rapidly, with annual revenue of + 53.31% to 196 million yuan compared with the same period last year; steady growth of testing business, and revenue of 556 million yuan for Jinghanyu; 40 million yuan for new landing gear business; or affected by the pace of delivery, revenue from brake control system and wheel business is-23.43 to 316 million yuan compared with the same period last year. On the profit side, the company's overall gross profit margin in 2021 was from + 4.53pcts to 78.93% compared with the same period last year, including + 4.39pcts to 79.39% for military products and + 11.05% to 74.02% for civilian products. Sales / management / R & D expenses increased by 141.42%, 95.87% and 52.47% respectively compared with the same period last year, resulting in an increase of 2.39pcts to 15.96%. Combined with the above factors, the company's net sales interest rate in 2021 fell by 1.57pcts to 48.53% compared with the same period last year, and its profit level declined slightly. In the fourth quarter alone, or affected by the delivery rhythm, the company achieved operating income of 318 million yuan, year-on-year-0.53%, and net profit of 97 million yuan, year-on-year-31.84%. Year-on-year gross profit margin is from + 3.52pcts to 78.11%, management / R & D / sales expenses are + 87.04%, 47.15%, 37.81%, and income tax is + 73.87%, respectively. Based on the above reasons, 21Q4 net profit margin is from-15.43pcts to 35.62% year-on-year, and the profit level has dropped a lot.
22Q1 performance continues to grow at a high level, and the prosperity of military products continues to accelerate. Fully benefiting from the accelerated release of downstream military demand, the company achieved operating income of 368 million yuan in the first quarter of 2022, + 44.73% last year, 154 million yuan in net profit, + 47.55% in the same period last year, and 154 million yuan in non-net profit, + 51.98% in the same period last year.
On the profit side, 22Q1's overall gross profit margin fell slightly to 71.89% compared with the same period last year, administrative expenses from + 59.07% to 24.55 million yuan, sales expenses from + 29.99% to 8.91 million yuan, financial expenses from + 22.17% to-1.99 million yuan, and R & D expenses from-18.78% to 9.83 million yuan year-on-year, making the expenditure rate for the period-1.30pcts to 11.21%. Combined with the above reasons, the company's 22Q1 net interest rate increased from + 0.50pcts to 49.68% compared with the same period last year. During the reporting period, profits maintained rapid growth under the high growth rate of Q1 last year, indicating that the company's military business has entered a golden period of development.
Forward-looking indicators such as inventory, advance payments and contract liabilities have increased significantly, which may indicate that the business will continue to improve.
At the end of 2021, the company's inventory reached 377 million yuan, a substantial increase of 67.90% over the beginning of the period: of which the scale of raw materials reached 111 million yuan, + 51.35% compared with the beginning of the period; semi-finished products reached 48 million yuan, + 87.00% compared with the beginning of the period, or showed that the company had full orders and was actively preparing for production; finished products were 73 million yuan, + 105.42% compared with the beginning of the period, and the performance after product delivery is expected to accelerate release. At the end of 2021, the company's contract liabilities were + 7660% to 69 million yuan higher than at the beginning of the period, and the prepayments were + 73.05% to 20 million yuan higher than at the beginning of the period. the substantial increase in forward-looking indicators such as inventory, advance payments and contract liabilities may indicate that the business boom will continue to improve. Affected by the increase in company rebates and Jinghan's combined table, the company's operating net cash flow reached 147 million yuan in 2021, + 36.41% year-on-year, and the cash flow situation further improved; accounts receivable reached 1.483 billion yuan at the end of the year, + 38.97% compared with the same period last year. However, considering that the downstream customers of the company are mainly military, good credit quality and low return risk, the cash flow situation is expected to continue to improve in the future.
Driven by triple logic, the company has entered a golden period of development. The company is the core supplier in the field of braking in China, fully benefiting from the prosperity of the military and civilian market demand, we think that the company has entered the fast track of development: 1. The company's brake products have the characteristics of consumables, and the continuous promotion of actual combat training in our country will increase the loss of brake products, and then provide long-term demand space for the company's military business. 2. The company is currently expanding to the aircraft landing system through early-stage fundraising projects, in order to upgrade from parts suppliers to subsystem manufacturers, so as to enhance its competitiveness in the field of landing; 3, acquire Lantai Airlines and successfully enter the civil aviation consumables supply chain of domestic airlines, civil aviation business is expected to further boost the company's performance.
Risk factors: the volume of military orders is not as expected; the progress of equipment arrangement is not as expected; the development of civilian products is not as expected.
Investment suggestion: the company is the core supplier in the field of braking in China, and is expected to fully benefit from the rapid release of military aviation equipment and the continuous expansion of civilian demand in the future. Taking into account the delivery pace of the military business, we lowered the company's 23-year net profit forecast for 2022 to 680,000,000 yuan (the original forecast was 760,060,000,000 yuan), increased the 2024 net profit forecast to 1.13 billion yuan, and the current price corresponding to PE is respectively times that of 25-18-14. Select AVIC Hi-Tech, Eleda and Zhong Jane Technology as comparable companies, and the average PE of the comparable company in 22 years is expected to be 30x. With reference to the valuation level of the comparable company and considering the rapid growth of the company's military orders and the expansion trend of the civilian business, the company is given 35 times PE in 2022 with a target price of 83 yuan, maintaining the "buy" rating.
