Report guide
The company released its annual report for the year 23, achieving revenue of 826 million yuan, an increase of 46.90%; net profit to mother of 92 million yuan, an increase of 16.65% over the previous year; net profit after deducting non-return to mother of 90 million yuan, an increase of 34.51% year on year. Among them, 23Q4 revenue was 222 million yuan, up 41.66% year on year, down 1.84% month on month; net profit to mother was 14.05 million yuan, down 26.65% year on year, down 49.19% month on month; net profit without return to mother was 13.56 million yuan, down 21.66% year on year and 50.57% month on month. The performance was in line with expectations.
Key points of investment
The civil aviation boom is picking up, driving the company's performance growth
The company's revenue in '23 was 826 million yuan, a year-on-year increase of 46.90%, mainly due to the restoration of the civil aviation boom. According to data from the Civil Aviation Administration, the passenger throughput of China's civil airports reached 1.26 billion passengers in '23, an increase of 142.2% over the previous year, and recovered to 93.2% in '19. By route, domestic routes (including Hong Kong, Macao and Taiwan) completed 1,212 billion passengers, an increase of 134.8% over the previous year. The number of international flights completed 473.18 million, an increase of 1184.6% over the previous year, and recovered to 34.00% in '19. Currently, there is still plenty of room for restoration on international routes. It is expected that the civil aviation industry will continue to improve in the future, which in turn will drive the company's business growth. Looking at the model, the company's aviation materials distribution product revenue in '23 was 772 million yuan, up 47.03% year on year; revenue from self-developed products was 53 million yuan, up 45.12% year on year. The company's gross profit margin in '23 was 24.37%, year-on-year -3.97 PCT, of which the gross profit margin for distributed products was 22.38%, -3.43 PCT year-on-year, and the gross margin for self-developed products was 53.25%, and -11.21 PCT year on year. The company's net profit margin in '23 was 11.13%, -2.94 PCT year over year. The decline in the company's profitability was mainly affected by factors such as price increases for a few suppliers during the reporting period, increased amortization after project consolidation, and share payments of 11.82 million yuan. In '23, the company's inventory turnover ratio was 3.21, and the accounts receivable turnover ratio was 3.82. The net operating cash flow was 4.61 million yuan, a year-on-year decrease of 49.95%. This was mainly due to an increase in revenue scale and an increase in the company's inventory preparation. In addition, customer accounts receivable were generally longer than the supplier's purchase period.
Distribution+self-developed two-wheel drive, optimistic about the company's future growth
The company spent 11.44 million yuan on R&D in '23, an increase of 41.32% over the previous year. The company seizes opportunities for large domestic aircraft and continues to increase investment in R&D to promote domestic replacement. As of '23, a total of 112 kinds of domesticated aviation materials of the company have passed the CAAC airworthiness certification by the Civil Aviation Administration, and some of the products of Runhe New Materials, a wholly-owned subsidiary, have been included in the COMAC standard materials manual. At present, the company has laid out and stored three production bases in Huizhou, Guangdong, Hangzhou, Zhejiang, and Longnan, Jiangxi to continue to promote R&D and production capacity building for domesticated aviation materials. The company is a leading domestic aviation materials distributor. The future distribution business is expected to continue to benefit from the restoration of the civil aviation boom, and self-developed products are expected to continue to be localized and replaced with large domestic aircraft. We are optimistic about the company's future development.
Profit forecasting and valuation
The company is a leading distributor of domestic aviation materials. The current civil aviation boom continues to recover, the low-altitude economy is developing rapidly, and the future delivery of large domestic aircraft is expected to benefit from the company's distribution and self-developed products. The net profit for 24-26 is estimated to be 1.20/1.62/195 million yuan, and the PE corresponding to the current price is 20.85/15.44/12.78 times, maintaining the “buy” rating.
Risk warning
Recovery of the civil aviation economy, domestic replacement of aviation materials, risk of falling short of expectations in fund-raising projects, and risk of bad debts