According to the “2023 Annual General Meeting of Shareholders Meeting Data” issued by the company, the company's 2024 financial budget is expected to achieve revenue of 51,026 billion yuan, an increase of 10.33% over the previous year; net profit of 3.762 billion yuan is expected, an increase of 25.00% over the previous year.
The 24-year financial budget maintained high profit-side growth expectations, and profitability continued to increase. According to the “2023 Annual General Meeting of Shareholders Meeting Data” issued by the company, the company released the 2024 financial budget. In 2024, revenue is expected to be achieved ($51.026 billion, +10.33% year over year), mainly due to increased sales; estimated operating costs ($44.618 billion, +8.34% year over year). From this, it is estimated that the company's gross margin is expected to reach 12.56% in '24, up 1.61 pct from '23, and maintain the trend of increasing profitability. In terms of expenses, estimated expenses for the period to be incurred ($2,069 million, +21.12% YoY), including: estimated administrative expenses ($1,149 million, +14.30% YoY), anticipated R&D expenses ($1,113 million, +14.14% YoY), and anticipated financial expenses (-208 million, an increase of 77 million over the same period in '23). It is expected to achieve net profit of 3.762 billion yuan, a year-on-year increase of 25.00%, and a net profit margin of 7.37%, up 0.86pct year-on-year. In terms of balance sheet, total assets are estimated for 2024 ($68.014 billion, +22.62% year over year), mainly due to an increase in accounts receivable and construction in progress in 2024; total liabilities ($48.566 billion, +23.86% YoY), mainly an increase in accounts payable in 2024.
A fixed issuance plan was launched for Shen Fei's partial relocation project and three major capacity building projects. The company issued the “Plan for Issuing A Shares to Specific Targets in 2023". It plans to issue no more than 154 million A shares to specific targets, and the total capital raised will not exceed 4.20 billion yuan, of which Aviation Industry Group plans to subscribe for 100 million yuan of company shares and Aviation Investment plans to subscribe for 200 million yuan of company shares.
This fixed release can further enhance the company's manufacturing and test flight capabilities, and strengthen the capacity building of titanium alloys and composites at the Shenbei New Area Aviation Industrial Park, providing a strong guarantee for meeting future needs.
At the same time, the company strengthened the maintenance and service guarantee capabilities of Jilin Airlines and issued the “Proposal on Capital Increase and Stock Expansion of Holding Subsidiaries through Public Listing” in October 2023. It plans to introduce no more than 2 investors and strive to make it an advanced domestic aircraft maintenance base.
Related sales continue to grow, and aviation products are expected to continue to grow. The company issued a notice on related transactions. In 2023, the company expects to purchase an amount of 23.804 billion yuan from aviation industry groups and other related parties, with an actual amount of 21.927 billion yuan. The estimated amount accrued in 2024 is $24.623 billion, with an increase of 3.44% and 12.30%, respectively, from the projected amount and actual amount for 23. The estimated deposit amount in related party finance companies is 275 billion yuan, an increase of 5.77% and 10.17%, respectively, from the estimated amount and actual amount accrued in '23. We believe that the company expects changes in related procurement amounts to show that the company's downstream demand is currently strong, and the prospects for order growth are good.
Profit forecast: The company's net profit for 2024/2025/2026 is estimated to be 37.68/46.25/5.535 billion yuan, corresponding to a valuation of 27, 22, 18 times, and maintaining a “highly recommended” rating.
Risk warning: Aviation product research and development technology risks, fluctuations in military purchase orders, and untimely supply from upstream suppliers affects the production of complete aircraft.