Event: the group announced its mid-term results in 2022. During the reporting period, the group achieved operating income of 25.813 billion yuan, a decrease of 20.84% over the same period last year, and a net profit of 1.154 billion yuan, down 3.75% from the same period last year.
Main points of investment
Helicopter business structure adjustment performance under pressure, avionics products continue to release. In terms of business sectors, the revenue of 2022H1 aviation complete aircraft segment reached 6.237 billion yuan, a decrease of 36.06% over the same period last year, mainly due to the adjustment of helicopter business product structure; aviation supporting systems and related businesses achieved revenue of 15.956 billion yuan, an increase of 9.93% over the same period last year, and avionics products were released; and the aviation engineering sector achieved revenue of 3.62 billion yuan, down 0.19% from the same period last year. In the current period, the group's comprehensive gross profit margin was 23.66%, an increase of 2.10 percentage points over the same period last year. The proportion of aviation supporting systems and related business sectors with higher gross profit margin has increased.
In the first half of the year, sales and management expenses increased, while the comprehensive expense rate decreased slightly. The sales / management / R & D / financial expense rate of 2022H1 is 1.31%, 6.16%, 5.70%, 0.36%, and + 0.18% / + 0.85% / + 0.86% /-1.1%, respectively. The comprehensive expense rate of 2022H1 Company was 7.07%, which decreased by 0.07% in the same period. The increase in the rate of sales expenses in the current period is mainly due to the substantial increase in the salary expenses of the staff and workers, with a total salary expenditure of 206 million yuan, an increase of 34.78% over the same period last year.
Injection of high-quality assets to speed up the development of airborne business. On June 10, 2022, AVIC announced a plan to absorb and merge AVIC and raise supporting funds. The merged company intends to absorb and merge AVIC and raise about 5 billion yuan. After the absorption and merger, AVIC directly holds 16.52% of the shares and 47.59% of the voting shares, which is still the controlling shareholder of AVIC. AVIC Mechatronics is a system-level supplier of military and civil aviation electromechanical products in China, and has an absolute leading position in the field of avionics. This reorganization will help to integrate the high-quality resources of both sides, enhance the core competitiveness to comply with the systematic, integrated and intelligent development trend of the global aviation airborne industry, and create an internationally competitive aviation airborne industry. achieve new leaps in coordinated development and industrial expansion to support the healthy development of the national aviation industry.
Investment suggestion: based on the overall revenue reduction caused by the restructuring of the company's helicopter business sector, we slightly downgrade the company's profit forecast: the company's operating income forecast for 2022-2024 is 644.79 / 748.69 / 86.114 billion yuan respectively, an increase of 6.9% / 16.1% / 15.0% over the same period last year. The net profit of homing was 28.76 / 34.43 / 4.209 billion yuan, up 21.4% / 19.7% / 22.2% over the same period last year. The corresponding EPS is 0.37 / 0.45 / 0.55 yuan respectively, maintaining the company's "buy-A" rating.
Risk tips: rising prices of raw materials, product structural adjustment risk, technological innovation risk, military purchase order fluctuation risk.