净利润同比增长40%，产品交付质量持续提升。1）公司2023 年净利润同比增长39.62%，毛利率及净利率分别同比增长0.95/1.63ppt 至29.7%/6.5%，我们认为主要系专业化整合推动公司资产质量及经营效率持续提升，规模效应强化公司盈利能力。2）分产品看，2023 年航空产品实现营收247.38 亿元，YoY+8.63%，毛利率30.37%，YoY+0.18ppt。防务产品2023 年实现营收10.75 亿元，YoY+10.57%，毛利率29.37%，YoY-1.34ppt。公司各类航空产品交付质量持续提升，圆满完成全年生产计划。2023 results are in line with market expectations
The company announced its 2023 results: operating revenue of 29.07 billion yuan, up 4.63% year on year; realized net profit of 1,886 billion yuan, up 39.62% year on year. Looking at the single quarter, 4Q23 achieved operating income of 8.276 billion yuan, up 9.07% year on year, up 22.61% month on month; net profit to mother was 236 million yuan, up 25.94% year on year, -62.24% month on month. The results are in line with market expectations.
Development trends
Net profit increased 40% year over year, and the quality of product delivery continued to improve. 1) The company's net profit in 2023 increased by 39.62% year on year, and gross margin and net profit margin increased by 0.95/1.63ppt to 29.7%/6.5%, respectively. We believe that it is mainly due to specialized integration to drive the continuous improvement of the company's asset quality and operating efficiency, and the scale effect strengthens the company's profitability. 2) By product, aviation products achieved revenue of 24.738 billion yuan in 2023, YOY +8.63%, gross profit margin of 30.37%, and YOY+0.18ppt. Defense products achieved revenue of 1,075 billion yuan in 2023, YoY +10.57%, gross profit margin 29.37%, and YOY-1.34ppt. The delivery quality of the company's various aviation products continues to improve, and the annual production plan has been successfully completed.
The cost rate expanded year-on-year during the period, and the business plan reflected expectations for high-quality development. 1) In 2023, the company's expenditure ratio was +1.77ppt to 21.76% year over year, with R&D expenses +2.13ppt to 12.03% year over year, and R&D expenses +27.09% year over year to 3.49 billion yuan. 2) The net cash flow from the company's operating activities in 2023 was 1,017 billion yuan, mainly due to a sharp increase in customer service payment notes receivable. At the end of 23, the company's notes receivable reached 6.371 billion yuan, YoY +66.02%. 3) The company announced its 2024 business plan and is expected to achieve revenue of 28.522 billion yuan, -1.67% year on year, and total profit of 2,437 billion yuan, or +8.0% year over year. The company adheres to the concept of high-quality development, continuously promotes cost reduction and cost savings, and continuously improves economic efficiency.
Leading aviation airborne systems, speeding up reforms or helping improve operational efficiency. 1) The company is the core supplier of aviation airborne systems in China. It has a relatively complete aviation airborne industry chain. The absorption and merger was completed in April 2023 and 5 billion yuan was raised to build production capacity for aviation gas induction subsystems, hydraulic actuation systems, etc. We believe that specialized integration will help give full play to the synergies and scale advantages of the airborne industry, and the company is expected to enjoy the dividends of the aviation equipment industry and continue to grow. 2) In the context of the State Assets Administration Commission continuing to promote the quality improvement of listed companies of central enterprises, various state-owned enterprise reform efforts may be accelerated. The company is the only listing platform for airborne systems under the Aviation Industry Group. We believe that the acceleration of state-owned enterprise reform is expected to improve the quality of the company's assets and operational efficiency, and help the company develop with high quality.
Profit forecasting and valuation
The company completed a major asset restructuring in April 2023. We raised the company's net profit forecast for 2024 by 20.7% to $2,069 billion, and first introduced a net profit forecast of 2,381 billion yuan for 2025. The current stock price corresponds to 28.6/24.9 x P/E for 2024/2025. We maintain our outperforming industry ratings and are optimistic about the company's development prospects as an airborne leader. After exclusion, we raised the target price by 58% to 14.87 yuan, corresponding to 34.8/30.2 x P/E in 2024/2025, with a potential increase of 21.5%.
risks
1) Special product price adjustment risk; 2) Market competition intensifies risk.
