Events:
The company publishes the 2023Q3 performance report. According to the company announcement, the company's 2023Q1-Q3 realized operating income of 3.623 billion yuan, an increase of 7.69% over the same period last year, and a net profit of 844 million yuan, an increase of 25.84% over the same period last year. The company's 2023Q3 realized operating income of 1.21 billion yuan, an increase of 13.67% over the same period last year, and a net profit of 293 million yuan, an increase of 50.06% over the same period last year.
The company's 2022Q3 performance meets market expectations.
Comments:
The demand of the main industry of new aviation materials is released at an accelerated pace, leading to sustained revenue growth. According to the company announcement, the company achieved operating income of 3.623 billion yuan (yoy+7.69%) in the first three quarters of 2023. In terms of products, the revenue of the aviation new materials business reached 3.55 billion yuan, an increase of 6.97 percent over the same period last year, mainly due to the increase in sales of aviation composite raw materials and brake products; the revenue of the machine tool equipment business reached 43 million yuan, an increase of 17.50 percent over the same period last year, mainly due to the growth of special equipment and aviation parts processing business. Our analysis shows that with the accelerated release of military aircraft and the accelerated landing of civil aviation orders, the downstream demand of aviation new materials business continues to expand, and the company's revenue for the whole year is expected to continue to maintain rapid growth.
Reduce cost and increase efficiency, superimpose product structure optimization, and the company's performance is growing rapidly. According to the company announcement, the company's 2023Q3 realized a net profit of 293 million yuan (yoy+50.06%) and 844 million yuan (yoy+25.84%) in the first three quarters.
Our analysis shows that: 1) the company reduced operating costs and redundant expenses, reduced costs and increased efficiency significantly, and the net profit rate of 2023Q1-Q3 was 23.43%, which was 3.54% higher than that of the same period last year. 2) the company optimized its product structure, increased the proportion of aviation new materials business with high gross profit margin, and greatly increased its profitability. the overall gross profit margin of 2023Q1-Q3 was 37.44%, an increase of 4.45pcts over the same period last year. With the continuous release of downstream demand and the emergence of economies of scale, the company's profitability is expected to further improve.
The cash flow is sufficient and steady, and the R & D investment will increase in the future. According to the company announcement, the cash flow generated by the company's operating activities in the first three quarters of 2023 increased by 209 million yuan over the same period last year, with good payback and abundant cash flow on hand. The company invested 114 million yuan in research and development in the first three quarters of 2023, an increase of 35.59 percent over the same period last year. The increase in cash flow shows that the company has good operating conditions and strong risk-taking ability, and the increase in R & D investment shows that the company vigorously promotes the upgrading of the industrial structure, enhances the competitiveness of the product market, and lays a solid foundation for the sustained and steady growth of future performance.
China's aviation composite industry core enterprises, downstream demand to boost the rapid growth of performance. 1) at present, the main aircraft models of the Navy and Air Force are still in a state of accelerated upgrading, the application proportion of superimposed new types of composite materials is increasing, and there is a higher demand growth space for aviation composite materials; 2) domestic large aircraft start the process of commercialization, civil aviation aircraft manufacturing transformation superimposed on the rising demand for domestic large aircraft, the domestic advanced composite material industry continues to be booming. 3) the company occupies the core position of civil and military aviation compound materials and is expected to fully enjoy the market expansion dividend. We expect the company's performance to maintain a high compound growth rate in the next few years.
Maintain profit forecasts and maintain "buy" ratings. We maintain the 2023-25 homing net profit forecast of 10.2 pound 13.6 / 1.7 billion yuan, the current share price corresponding to PE is 34-25-20 times. Considering that the company, as the core enterprise in the aviation carbon fiber composite field, is jointly driven by the future demand for military and civil aircraft, the company's long-term performance is expected to continue to grow high, so it maintains a "buy" rating.
Risk hint: the growth rate of military expenditure is not as expected; the purchase of equipment is not as expected; and the demand for aviation compound materials is not as expected.