Main points of investment
The company released its annual report for 2020: revenue reached 1.76 billion yuan, up 13.93% over the same period last year; net profit returned to the mother was 263 million yuan, up 23.58% over the same period last year; and net profit was deducted from 254 million yuan, up 23.99% from the same period last year.
In 2020, with the diversified development of the company's business and industry segmentation, in order to better highlight the changing trend of the main business, the statistical caliber of the main business has been slightly adjusted. In terms of the adjusted business sector, the company's aviation military revenue in 2020 was 401 million yuan, an increase of 31.20% over the same period last year, accounting for 22.76% of the company's operating income, with a gross profit margin of 34.45%, an increase of 1.34pct over the same period last year. Sensor control realized revenue of 788 million yuan, an increase of 9.07% over the same period last year, accounting for 44.80% of the company's operating income and 36.40% of the gross profit margin, which decreased 0.14pct over the same period last year. Intelligent transportation realized revenue of 525 million yuan, an increase of 10.35% over the same period last year, accounting for 29.84% of the company's operating revenue, with a gross profit margin of 45.67%, an increase of 1.35pct over the same period last year; the company's overall gross profit margin was 38.87%, an increase of 0.38pct over the same period last year.
During the reporting period, sales of aviation military products increased significantly. The military production tasks of the subsidiary Hanzhong 101 and the parent company are growing rapidly. In order to make up for the production and delivery gap caused by the epidemic at the beginning of the year, the military business units have implemented the "611" working system and actively formulated plans to guarantee the production of spare parts. The mainframe delivery guarantee, special task support and key aircraft flight test support have been completed on schedule. In addition, due to the changes in the product structure of the parent company, the number of supporting products with lower unit price and higher sales volume has increased. Sales of aviation military products increased by 298.20% over the same period last year, and production increased by 255.14% over the same period last year.
Hanzhong, a subsidiary, achieved an operating income of 259 million yuan in 20120, an increase of 19.20% over the same period last year, and a net profit of 37 million yuan, an increase of 9.44% over the same period last year. The main reason is that the revenue of a certain model is currently recognized according to temporary pricing, resulting in a reduction in the overall gross profit margin. During the reporting period, the subsidiary Hanzhong 101 scientific research production and new product orders increased significantly. In order to meet the production delivery requirements, the raw materials, self-made semi-finished products and finished goods in stock all increased. At the end of the period, the company's inventory was 593 million yuan, an increase of 26.36% over the same period last year.
During the reporting period, the company repurchased 5.4581 million shares of the company (accounting for 0.92% of the company's total share capital) through a special securities account for share repurchase, with a total transaction amount of 50.4996 million yuan. All the shares were transferred to the special account of "AVIC Electric measuring Instruments Co., Ltd.-Phase I employee Stock ownership Plan" in July 2020 at a transfer price of 9.25 yuan per share. The lock-up period of the underlying stock is 12 months.
We adjust our profit forecast and expect the company's 2021-2023 net profit to be 4360.85 million yuan per share and 0.62 billion yuan per share respectively, corresponding to the closing price of PE on March 16, which is times that of 20-17-15, maintaining the "prudent overweight" rating.
Risk hint: the expansion of emerging areas is not as expected; the progress of military development and procurement is not as expected.