Incident: The company released its report for the first quarter of 2024. In the first quarter of 2024, it achieved revenue of 1,317 million yuan, +5.22% year over year, net profit to mother of 351 million yuan, +4.95% year over year; net profit after deducting non-return to mother was 351 million yuan, +7.76% year over year. According to the company's 2023 annual report, the company achieved revenue of 4.780 billion yuan, +7.50% year on year, net profit to mother of 1,031 billion yuan, +34.90% year on year; net profit after deducting non-return to mother was 1,006 billion yuan, +33.63% year over year.
The main aviation materials industry is growing steadily and playing a pivotal role. According to the company's 2023 annual report data, by industry, the company's main aviation materials business achieved revenue of 4.616 billion yuan, +8.30% year-on-year, gross profit margin of 36.79%, and +5.92pct; the main business of the machine tool industry achieved revenue of 65 million yuan, -22.10% year-on-year, gross profit margin 7.75%, +14.81 pct year on year; the company's gross profit margin was 36.75%, +5.81 pct year on year, net profit margin 21.71%, year-on-year +4.45pct. In the first quarter of 2024, the company's gross profit margin was 41.21%, +0.71 pct year on year, net profit margin 26.87%, +0.39 pct year on year.
Continue to increase investment in research and development. In 2023, the company invested a total of 181 million yuan in R&D, applied for 46 patents, and obtained 26 authorized patents. The company continued to increase R&D investment and enhance its ability to innovate independently.
The aviation carbon fiber pre-impregnation faucet continues to improve, and profitability continues to improve. According to the company's 2021-2023 report data, the growth rate of the company's net profit to mother continues to be higher than the revenue growth rate, or is mainly due to changes in the company's product structure, cost reduction and efficiency, and scale effects. In the field of new products, the company continues to carry out key technical research on next-generation aeronautical composites and structural molding; completed the C929 front-fuselage wall panel trial production verification (PPV) wall panel development, completed the development and delivery of key components for commercial aero engine composites, and continued to improve from military to civilian and aviation carbon fiber pre-impregnation leaders, or open up new revenue and performance growth space.
Investment advice: The company's net profit for 24/25/26 is expected to be $11.04/13.29/16.55 billion yuan, YoY +7.1%/+20.3%/+24.5%. Maintain an “Overweight” rating.
Risk warning: Industry competition risk; orders fall short of expectations.