Key points of investment
Incident: On April 16, 2024, Andaville released its 2023 annual report. In 2023, the company achieved total operating revenue of 851 million yuan, an increase of 106.25% over the previous year, and net profit of 113 million yuan to mother, which reversed losses and increased significantly by 347.69% over the previous year.
Performance improved markedly, with new highs in revenue, total profit and order reserves. During the reporting period, the company achieved total revenue of 851 million yuan, an increase of 106.25% over the previous year, and a sharp increase of 347.69% over the previous year. The performance improved markedly. Revenue, total profit and order reserves all reached record highs. This was mainly due to the sharp increase in aviation seat delivery and settlement volume, delivery of major training system equipment projects, and the recovery of the civil aviation industry, which led to the continuous improvement of operating efficiency and cost control capabilities during the reporting period. By business, airborne equipment development business revenue was 498 million yuan, up 293.07% year on year. Thanks to the increase in aviation seat delivery and settlement volume for a key model, the helicopter simulation training system completed centralized delivery, and the continuous growth of cabin system equipment business such as aviation kitchen plug-ins; aviation maintenance business revenue was 183 million yuan, an increase of 22.55% year on year, mainly due to the continuous recovery of the civil aviation industry, expansion of the company's civil aviation maintenance market, and improvement of internal operation management capabilities; measurement and control equipment development business revenue was 119 million yuan, an increase of 9.60% year on year. Products such as general distributed automated testing system software for drones have successively won bids or been delivered.
The defense industry and aerospace go hand in hand, and the core products have significant advantages. In the defense industry, the company has strong development capabilities, stable customers and supporting relationships. Among them, airborne equipment products are mainly equipped with helicopters and fixed-wing carriers developed by the aviation industry to provide them with system and equipment level products. At the same time, the company also provides integrated systems and maintenance services including measurement, control, support, training and maintenance. After more than 20 years of technology accumulation, the company has leading competitive advantages in many segments. In the civil aviation sector, in the civil aviation market, the company mainly acts as a component maintenance service provider and airborne equipment manufacturer, serving airlines, aircraft manufacturers and aviation maintenance companies, providing parts maintenance services and civil aircraft cabin equipment products. In terms of civil aviation maintenance, the company, as a maintenance service provider, has complete maintenance licenses and systems such as CAAC, FAA, EASA and JMM, and its maintenance capacity basically covers all mainstream models. In terms of civil aircraft manufacturing, the company has mature civil aircraft cabin PMA products. At the same time, the company is also a pioneer in the localization of airborne equipment for civil aircraft. Aviation kitchen plug-in products have been delivered to ARJ21 airliners for use and have received good market feedback.
Increase research and development to consolidate the steady growth trend, and lay out a low-altitude economy to speed up the development of adapted products. In 2024, the company will continue to improve its R&D capabilities. On the one hand, it will focus on building technical capabilities including simulation and forward design of aviation kitchen plug-ins, and strive to achieve FAA/EASA airworthiness forensics for aviation kitchen plug-in products and the addition of Airbus “SFE” suppliers. On the other hand, the low-altitude economy is a national strategic emerging industry, mentioned many times in policy documents such as the Central Economic Work Conference and government work reports. The company's products such as aviation seats, aviation navigation equipment, cabin equipment, measurement, control and support equipment, and aviation composite components are widely equipped and used in the helicopter field. The product application scenarios are highly compatible with the low-altitude economy, and the core technology can be extended to fields related to the low altitude economy. In 2024, the company will develop eVTOL series products to promote research and development of key product projects such as implementation, virtual and structural (LVC) joint training systems, etc. The company has carried out extensive business contacts and technical connections with industry customers, and some customers have entered the business negotiation stage for specific products to seize opportunities in strategic emerging industries.
Investment advice: As a high-end equipment manufacturer in the aerospace and defense industry, Andaville continues to provide customers in the aerospace and defense industry with system and equipment-level R&D and production, testing and verification, solutions and continuous services, and has a clear leading position. We forecast the company's 2024-2026 revenue of 9.83/11.21/1.270 billion yuan, a year-on-year increase of 15.5% /14.0% /13.3%, and net profit to mother of 1.39/1.59/180 million yuan respectively, up 22.1%/14.4%/13.6% year-on-year, corresponding EPS of 0.54/0.62/0.71 yuan, PE 21.9/19.2/16.9. The first coverage gave it an “increase in weight” rating.
Risk warning: Business development falls short of expectations, project delivery and acceptance falls short of expectations, and new technology product development falls short of expectations.