Event
On October 30,2023, the company released the third quarterly report of 2023, realizing revenue of 1.711 billion yuan (year-on-year +72.8%) and net profit of 167 million yuan (year-on-year +24.5%) in the first three quarters;23Q3 realized revenue of 529 million yuan (year-on-year +44.0%, month-on-month-15.1%) and net profit of 51 million yuan (year-on-year +26.3%, month-on-month-21.4%).
Comment
The actual performance was higher than the appearance, and steady growth was achieved under the phased slowdown of the industry. The actual performance of the company is higher than the appearance. After excluding the influence of share payment, the company realized 230 million yuan in the first three quarters, with a year-on-year increase of +50.42%, and 70 million yuan in Q3, with a year-on-year increase of +32%. The Company actively explored the market, enhanced its competitive advantage of products, and achieved an increase in sales orders.
Product structure affects gross profit margin, equity incentive accrual pressure is expected to ease. The gross profit margin of the Company in the first three quarters was 27.6%(year-on-year-6.3pct), and the net profit margin of parent company was 9.8%(year-on-year-3.8pct); among them, the gross profit margin of 23Q3 was 24.0%(year-on-year-8.9pct), and the net profit margin of parent company was 9.7%(year-on-year-1.4pct). The change of product structure and the increase of production capacity of Deyang Plant were the main reasons for the decrease of gross profit margin. During the first three quarters, the expense ratio was 12.6%(year-on-year-2.1pct). At present, the equity incentive expenses were withdrawn at a high point, and the pressure of subsequent equity incentive expenses was expected to be reduced.
Downstream demand is strong, actively stock production. The inventory of Q3 of the Company was RMB 840 million yuan,+5.3% compared with the beginning of the period, and the prepayment was RMB 80 million yuan,+45.5% compared with the beginning of the period. The inventory remained high and the prepayment increased or reflected that the Company actively carried out stock preparation. Q3 contract liabilities of 0.07 billion yuan, compared with the beginning of-34.0%, waiting for a new round of orders issued.
Military and civilian two-wheel drive demand growth, capacity release tamp the foundation of high performance increase. The company has a deep layout of Liyang medium and large-scale models, vigorously develops domestic and foreign civil aviation development markets, fully puts into operation the intelligent production line of its subsidiary Delan Aerospace, and consolidates the high elastic foundation of performance due to its superior production capacity resonance and high demand increase.
Earnings forecast, valuation and rating
Hangfa racetrack is booming, the company has a deep layout of Liyang medium volume models, continues to explore the international subcontracting market, and has high flexibility in performance. It is estimated that the net profit attributable to the parent company from 2023 to 2025 will be 2.51/4.43/6.37 million respectively, with a year-on-year growth rate of 36.8%, 76.7% and 43.8%, and the corresponding PE will be 29.1/16.5/11.5 times respectively, maintaining the "buy" rating.
Risk hint
The delivery speed of key models is not as fast as expected, and the release of production capacity is not as expected.