occurrences

Recently, Lekai New Materials released its 2023 three-quarter report, achieving operating income of 4.221 billion yuan, an increase of 22.73% over the previous year, and net profit of 243 million yuan, an increase of 28.11% over the previous year.

reviews

1. The company completed asset restructuring in the third quarter of this year to create a development platform for the “Aerospace Intelligent Manufacturing” industry under the Aerospace Science and Technology Group. The performance in the third quarter of 2023 maintained relatively rapid growth. In the past, the company was mainly engaged in information anti-counterfeiting materials, fine chemical materials, and electronic functional materials. Due to significant adverse effects on the industry in 2020, the company's operating income fell to 170 million yuan in 2022, and net profit was only 0.5 billion yuan. There is uncertainty about traditional business revenue and profit. In the third quarter of this year, the company completed the issuance of shares to purchase two major assets, aerospace energy and aerospace molding, belonging to the 7th Aerospace Academy, and entered the oil and gas equipment and auto parts business. Aerospace energy and aerospace molding ranked at the top of their respective industry segments. The company's asset volume and performance scale increased markedly. After the restructuring, the company's operating income reached 4.879 billion yuan and net profit of 325 million yuan in 2022.

On October 18, 2023, the company name was officially changed to “Aerospace Intelligent Manufacturing Technology Co., Ltd.”. The proposed stock abbreviation “Aerospace Intelligent Manufacturing” is still subject to the final approval results of the Shenzhen Stock Exchange. In the third quarter of 2023, the company achieved operating income of 4,221 million yuan, a year-on-year increase of 22.73%, net profit of 243 million yuan, a year-on-year increase of 28.11%, and maintained a relatively rapid growth in performance.

2. Aerospace Energy is mainly engaged in R&D and manufacturing of perforation equipment and high-end completion equipment in the field of oil and gas equipment. It has successively realized the localization of domestic offshore oil field perforation equipment, high-end completion equipment and shale gas cluster perforation equipment. It is one of the leading domestic oil and gas well drilling engineering technology enterprises and has strong integrated support capabilities. At the same time, Aerospace Energy is also engaged in military explosive-related business, providing military explosives equipment products with excellent texture and reliable performance for national defense and military industry units. The company's military explosives production line automation project is currently under construction., the estimated construction period is three years, that is, 2025 Annual production contributes to profit. Aerospace Energy achieved revenue of 504 million yuan and net profit of 183 million yuan in 2022, maintaining strong profitability. The 2023-2025 performance promises are 204, 2.26, and 238 million yuan.

3. Aerospace Molding is one of the few companies in China that has simultaneous R&D and manufacturing capabilities for automotive parts and mold design and production. On the basis of the upgrading and innovation of existing interior and exterior business technology, it has achieved the common development of new energy vehicles and fuel vehicle interior and exterior technology. It has successfully provided mass production support for various new energy models from mainstream automobile manufacturers such as BYD, GAC Aan, Changan Automobile, Geely Automobile, etc., and has successfully entered the supplier system of new car builders such as NIO Auto, Wenjie, etc., and has carried out collaborative design of interior and exterior parts products. Some products have received mass production orders, aerospace molding related new energy products Revenue as a share of main business revenue has risen from over 20% in 2020 to nearly 50% in 2022. Aerospace Molding takes the development and production of high-end products as the focus of the company's product strategy, and has formed a strategic development plan with plastic parts for middle and high-end automobiles as the core, integrated R&D and intelligent manufacturing of smart cockpits and autonomous driving as the path. Currently, it is vigorously carrying out pre-research, technology development and market expansion work on smart cockpit related products. Some products have entered the mass production stage, and related technology and product application and promotion work is being carried out with automakers. Aerospace Molding's 2022 revenue was 4,211 million yuan, net profit was 183 million, net profit was 137 million yuan, and net profit was 137 million yuan. The 2023-2025 performance promises were 0.96, 1.06, and 114 million yuan.

4. The 7th Aerospace Research Institute belongs to the Aerospace Science and Technology Group. It is China's major aerospace equipment production base, important aerospace product supporting cooperation base, defense product and aerospace product development and production base. It undertakes a large number of scientific research and production tasks in major national projects and commercial satellite launch missions such as national manned space projects and lunar exploration projects. The subordinate units include seven departments, Sichuan Aerospace Long March Equipment Manufacturing Co., Ltd., Sichuan Aerospace Electronic Equipment Research Institute, Sichuan Aerospace Beacon Servo Control Technology Co., Ltd., Sichuan Aerospace China South Pyrotechnic Technology Co., Ltd., Sichuan Aerospace Zhongtian Power Equipment Co., Ltd., etc. In 2020, the Seventh Aerospace Academy achieved operating income of 16.7 billion yuan and net profit of 684 million yuan. During the “14th Five-Year Plan” period, along with the rapid development of the domestic military industry and commercial aerospace fields, the performance of the Seventh Aerospace Academy is expected to maintain a relatively rapid growth rate.

5. As the main military business of the Seventh Aerospace Research Institute and a platform for the development of the high-quality civilian goods industry, the company is expected to further inject high-quality assets in the future. Since its establishment, the 7th Aerospace Academy has been committed to building a world-class aerospace equipment manufacturing company. In order to accelerate the achievement of strategic goals and development plans, the 7th Aerospace Academy urgently needs to inject its high-quality assets into listed companies, create a listing platform for industrial development, promote resource integration and capacity layout in business sectors such as intelligent equipment, advanced manufacturing, and aerospace applications in an integrated manner, and use the capital market to provide sufficient and timely financial support for the development of the military and civilian products business of the 7th Aerospace Academy, and promote the expansion and strengthening of the main military industry and high-quality civilian products industry. We believe that as a listing platform for the 7th Aerospace Academy, the company is expected to receive further asset injections into the main military business and the high-quality civilian goods industry in the future.

6. Profit forecast and investment rating: We expect the company's net profit from 2023-2025 to be 3.53, 4.52 and 550 million yuan, up 6933%, 28%, and 22% from the previous year. The current stock price corresponding to PE is 27, 21, and 17 times, covering the first time, giving it a “buy” rating.

Risk warning

Competition in the industry has intensified; downstream demand has fallen short of expectations; and there is uncertainty about further asset injection at the Seventh Aerospace Institute.