Main points of investment
The company is a domestic distributor of high-quality aviation materials, domestic civil aviation and shipping will resume in 2023, and the company's performance is expected to grow rapidly. The company is an important link between the upstream and downstream of the aviation materials industry chain, and the aviation materials distribution business is positively related to the prosperity of the civil aviation industry. 2023Q1, the total transport turnover of China's civil aviation industry is 23.99 billion ton / km, and the overall transport scale of the industry is equivalent to 77.6% of the same period in 2019, an increase of 40% over the same period last year and 39% from the previous year. The civil aviation industry continues to recover. 2023Q1, the company achieved revenue of 162 million yuan, an increase of 32% over the same period last year, and a net profit of 25 million yuan, an increase of 34% over the same period last year. 2023H1, China's civil aviation industry completed a total transport turnover of 53.13 billion ton / km, an increase of 81% over the same period last year. Thanks to the recovery of civil aviation shipping, the company's performance is expected to grow rapidly.
The revenue of the company's self-research products is growing rapidly, and the high gross profit margin increases the company's profitability. The company began to lay out the domestic aviation materials earlier, and the variety of products is becoming more and more abundant. By the end of 2022, 82 kinds of domestically developed products have passed various airworthiness certifications of the Civil Aviation Administration of China, including tape, cleaning agent, disinfectant, interior wallpaper, pilot headphones, ground headphones, etc., which can be used to equivalent replace the imported aviation materials on Boeing Co and Airbus airliners operated in China. In addition, some of the products of Runhe New Materials, a subsidiary of the company, have been included in the Comac Standard Materials Manual. In 2022, the company's revenue from self-research products was 36.8028 million yuan, an increase of 46.52% over the same period last year, and the gross profit margin was 64.46%, significantly higher than the 25.81% gross profit margin of distributed products.
Fund-raising projects to increase production capacity, the localization of aircraft materials is expected to build the company's second growth curve. The company's IPO fundraising project "Guangdong Runhe New Materials Co., Ltd. Aviation non-metallic materials, composite materials, aviation cleaning products production base construction project" will build four new production lines of interior decoration film, aviation special function tape, disinfection and cleaning agent, aircraft bulk hold floor and side plate, in order to expand the production capacity of disinfection cleaning agent. Industrial transformation of the R & D achievements of interior decorative film, aviation special function tape and aircraft bulk hold floor and side panels. The improvement of the company's large-scale production capacity can meet the needs of customers for the localization of air materials, and the localization of air materials is expected to build the company's second growth curve.
The second C919 is delivered to China Eastern Airlines, and the company is expected to fully benefit from the accelerated pace of production and delivery of large domestic aircraft. On May 28, 2023, the C919 made its commercial maiden flight. as of July 12, the first C919 carried out a total of 87 commercial flights, with an average occupancy rate of nearly 80% and serving more than 10,000 passengers. On July 16, China Eastern Airlines officially received the second domestic C919 airliner.
According to Comac's June data, the C919 has received 1061 orders from more than 30 customers. Some of the localized aviation materials of Runhe New Materials, a wholly owned subsidiary of the company, have been approved by Comac process Materials of China. With the accelerated pace of production and delivery of C919, the demand for aircraft materials in domestic large aircraft manufacturing is expected to increase significantly. The company's aviation materials distribution business and self-developed and self-produced aviation materials business are expected to fully benefit.
We estimate that the return net profit of the company from 2023 to 2025 is 1.14,1.48,188 million yuan respectively, and the corresponding share price PE is 25,20,15 times respectively, covering for the first time and giving "overweight" rating.
Risk hint
The recovery of the domestic air transport industry is not as expected; the rise in procurement prices caused by exchange rate fluctuations and other factors; the development of self-produced business is not as expected; the development of domestic large aircraft is not as expected.