Incident: The company released its 2023 annual report and the first quarter report of 2024. In 2023, the company achieved revenue of 46.248 billion yuan, +11.18% year-on-year, net profit of 3.07 billion yuan, +30.47% year-on-year; net profit after deducting non-return to mother of 2,910 billion yuan, +32.78% year-on-year. The first quarter of 2024 achieved revenue of 9.493 billion yuan, +3.47% year on year, net profit to mother of 716 million yuan, +11.58% year on year; net profit after deducting non-return to mother of 718 million yuan, +12.63% year on year.
The aviation manufacturing industry is growing steadily. By product, according to the 2023 annual report, the aviation manufacturing industry revenue was 45.953 billion yuan, +11.39% year on year, gross profit margin 10.99%, +1.01 pct year on year; other revenue was 75 million yuan, -40.62% year on year, gross profit margin 7.37%, and -2.41 pct year on year.
Profit margins increased, and the 2024 performance target increased by 25%. According to the company's 2023 annual report, the company's gross margin was 10.95%, +1pct year on year, and the net profit margin was 6.51%, and +0.95pct year on year. According to the company's 2024 quarterly report, the company's gross margin was 12.09%, +0.77pct year on year, net profit margin 7.52%, and +0.57pct year on year.
The company's gross margin and net profit margin both rose upward, driving the company's profit growth rate faster than the revenue growth rate. According to data from the company's 2023 shareholders' meeting, in 2024, the company plans to achieve operating income of 51,026 billion yuan, an increase of 10.33% over the previous year; it plans to achieve net profit of 3,762 billion yuan, an increase of 25.00% over the previous year.
The leading position is prominent, and it actively plays the role of “chain leader”. The company is a large-scale modern aircraft manufacturer integrating scientific research, production, testing, test flight, maintenance and service guarantee. It has strong core competitiveness and leading industry position in the field of aviation defense equipment. In the “window period” of iterative upgrading of equipment construction, the optimization and reform of the aviation industry system is imminent, and the transformation and upgrading drive is strong. The company will give full play to its role as a “chain leader” in the aviation equipment industry chain, forwardly lay out strategic emerging industries, and accelerate the construction of a modern industrial system. In the future, in the military and civil aircraft sector, the company will continue to coordinate current orders and medium- to long-term plans to formulate annual business plans and three-year rolling plans to balance production and continuously improve profitability.
Investment advice: The company's net profit for 24/25/26 is estimated to be 38.32/49.89/6467 billion YoY +27.4%/+30.2%/+29.6%. Maintain a “buy” rating.
Risk warning: Equipment finalization falls short of expectations, and downstream demand is shrinking.