Introduction to this report:
On April 26, the company held a shareholders' meeting. The 2024 business target plan is to achieve a 10.33% year-on-year increase in revenue and a 25.00% year-on-year increase in net profit. Military aircraft leaders promote high-quality development, maintain rapid growth, and demonstrate confidence in long-term development.
Key points of investment:
Maintain the target price of 71.83 yuan and maintain the increase in holdings. The company benefits from the release of strong demand for fighter jets in the context of military training and preparation. The combined focus is on improving quality and efficiency. Profitability continues to improve, and performance is expected to maintain rapid growth. Considering the phased fluctuations in downstream demand, we maintained the 2024-26 EPS to 1.43/1.85/2.25 yuan. Considering that the company is highly determined for China's military aircraft leader and future demand, we gave the company 52.43 times PE in 24 years, maintained a target price of 71.83 yuan, and maintained an “increase” rating.
Rapid growth is expected to continue in 2024, demonstrating the company's confidence in long-term development. According to shareholders' meeting data, in 2024, the company plans to achieve operating income of 51,026 billion yuan, an increase of 4.778 billion yuan over the same period of the previous year, an increase of 10.33%; it plans to achieve net profit of 3,762 billion yuan, an increase of 752 million yuan over the same period of the previous year, an increase of 25.00% over the same period last year. The company focuses on its primary responsibility and main business, continues to target the special work requirements for building world-class enterprises, deepening and upgrading the reform of central enterprises, coordinate and advance nine key tasks, coordinate the “34 Five-Year Plan” development goals, and continue to accelerate the pace of reform and development.
Accelerating high-quality development is expected to maintain a high performance growth rate. 1) China's significant gap in the number and generation of military aircraft compared to the US is expected to drive the fighter industry to continue to grow rapidly; 2) In the future, the company is committed to achieving integrated development of “research, manufacturing, and maintenance”, accelerating capacity building, and optimizing the industrial layout; 3) Along with military pricing mechanism reform, the company's business expansion, product price increase, and management level improvement, profitability is expected to continue to improve, and profits are expected to grow rapidly.
Catalyst: The accelerated development of new equipment has brought about improved demand, significant enhancement of military aircraft maintenance capabilities, and breakthroughs in design and development capabilities.
Risk warning: New models are being released faster than expected, and new business expansion is not as fast as expected.