Incidents:
On August 30, the company released its semi-annual report, achieving revenue of 2,019 billion yuan in the first half of the year, -24.96% year on year.
Guimu's net profit was $14 million, or -76.63% year on year. Of this, net profit after deduction of Fugimu was $13 million, up 13.77% year on year. The basic earnings per share were 0.0188 yuan.
Decrease in operating income and increase in inventory
Revenue for the second quarter was 1,295 million yuan, a year-on-year decrease of 39.22%, mainly due to factors such as a decrease in the number of trainers delivered. In the first quarter of 2021, 55 million yuan of job stabilization subsidies received from the epidemic was included in other income. Other income for the same period this year was 0, which affected apparent profits to some extent. The company's inventory was 4.157 billion yuan, an increase of 38.42% over the previous year, mainly due to an increase in raw material inventories.
The position of the national team in the field of trainers has been further strengthened
Currently, the main products are CJ6 junior trainers, K8 basic trainers, and L15 advanced trainers. CJ6 has obtained TC/PC certification and is being remodeled and improved to enhance its ability and competitiveness to adapt to the civilian market; K8 is developing new basic education to seize the screening and basic trainer market; and extending the trinity training efficiency system with L15 as the core.
The development of model products and defense products progressed effectively, and the company's model development work continued to advance steadily in the first half of the year to optimize the industrial structure, injecting new momentum into the company's subsequent development; related defense products successfully completed major node work, laying the foundation for further market development. The holding subsidiary Changjiang General Aviation will soon complete its capital increase and share expansion, which will help the company focus on its main business.
Profit Forecasts, Valuations, and Ratings
Taking into account factors such as the decrease in the number of trainers delivered by the company, we expect 22-23 revenue to be 74.35 and 8.591 billion yuan respectively (the original values were 7,531 and 8.650 million yuan), net profit of the mother was 0.56/75 million yuan respectively (the original values were 226 and 269 million yuan), the revenue for 24 years was 9.236 million yuan, net profit was 110 million yuan, the 2-year CAGR was 40.29%, EPS was 0.08/0.11/0.15 yuan/share, and the corresponding PE was 325x/241x/165x, respectively. Maintain an “increase in holdings” rating.
Risk warning:
The international market for trainers falls short of anticipated risks; the domestic market for trainers falls short of anticipated risks; delivery of defense products falls short of expected risks; product development progress falls short of anticipated risks; and risk of military product price reduction.
