Downgrade earnings forecast and maintain "buy" rating
Aerospace Technology released three quarterly reports, 2023Q1-Q3 achieved revenue of 1.711 billion yuan (yoy+72.75%), home net profit of 167 million yuan (yoy+24.47%), deducting non-net profit of 154 million yuan (yoy+25.85%).
Considering that the company's new Deyang plant is still in the early stage of capacity climbing, and the product structure is mainly civilian products, and the gross profit margin is lower than that of military products, we downgrade the company's aviation product revenue and gross profit margin forecast, and it is estimated that the company's EPS in 2023-2025 will be 1.71 shock 2.93 shock 4.19 yuan respectively (the previous value is 1.93 pound 3.42 shock 4.77 yuan).
The average PE of comparable company's 24-year Wind is 14 times. Considering that the proportion of new model accessories in the company's ring forging products is higher and the performance flexibility is greater, the company is given 23 times PE in 24 years, with a target price of 67.39 yuan (the previous value is 82.96 yuan), maintaining the "buy" rating.
Production capacity gradually released, performance year-on-year growth performance outstanding
Excluding the impact of share-based payments, 2023Q1-Q3 achieved a net profit of 229 million yuan, an increase of 50.42% over the same period last year. In a single quarter, the company's Q3 realized revenue of 529 million yuan (yoy+43.95%,qoq-15.07%) and net profit of 51.29 million yuan (yoy+26.26%,qoq-21.36%). Excluding the impact of share payment fees, the company Q3 achieved a net profit of 69.67 million yuan (yoy+32.07%,qoq-18.78%) in a single quarter. According to the company announcement, in the first three quarters, the company actively opened up the market, vigorously promoted technological innovation, continuously enhanced the competitive advantage of products, was fully recognized by customers, and realized an increase in sales orders; at the same time, with the full production of its subsidiary Delan Aerospace, the production capacity has been gradually released, the company's overall production capacity has been steadily improved, and product sales growth has been achieved.
The adjustment of product structure or the decline of gross profit margin, the company actively prepares production to highlight the downstream prosperity. 23Q1-Q3 's single-quarter gross profit margin is 29.53%, 28.85%, 23.95%, respectively, year-on-year changes-5.15/-5.43/-8.88pcts. We believe that the decline in gross profit margin is mainly due to the fact that the new Deyang plant is still in the early stage of capacity climbing, while the company's aviation revenue share is increased. By the end of the 2023Q3 period, the advance payment of the company was 75.3983 million yuan, an increase of 45.46% over the beginning of the year. The inventory item of the company at the end of Q3 phase was 837 million yuan, an increase of 5.32% over the beginning of the year. The inventory level remained high, or reflected that the company was actively preparing goods for production, and the advance payment to upstream material suppliers increased rapidly.
Issued convertible bond plan to further expand production, continuous foreign investment to improve the capacity building company of the whole industry chain for 23 years to carry out industrial chain extension measures, the newly established company Guizhou Juhang will meet the surface treatment production needs of the company's ring forging products, and the establishment of the joint venture Huaianzhi will provide a complete digital factory solution to the problems existing in the traditional production mode in the aviation forging field. The two investment projects will help the company to improve the aviation forging surface treatment capacity and intelligent production line construction capacity. At the same time, the company issued a convertible bond plan on June 15, which intends to raise 667 million yuan, of which 467 million yuan is invested in the precision manufacturing industrial park of large-scale ring forgings for aviation and aerospace, and 200 million yuan is used to replenish the flow. the construction period of the industrial park project is 36 months. after completion, it will form an annual production capacity of 3000 tons of special alloy precision ring forgings.
Risk hints: intensified market competition; market development risks; major adverse changes in the downstream market.