Focusing on the aviation industry chain, business coverage equipment development and support, aviation maintenance and service, the new aviation technology was established in 1994, the full name is Guangzhou Hangxin Aviation Technology Co., Ltd., committed to providing technology and product services for aircraft safety construction in the aviation field. After long-term technological accumulation and continuous innovation, Aeronautical Technology has developed into a leading domestic aviation service and equipment integrated support supplier integrating aviation maintenance and support, aviation asset management, airborne equipment development, test equipment development, data analysis, application and service, and airborne equipment modification. The company's net profit in 2018 fell 24.58% from the same period last year, which is related to the expense of acquiring MMRO. In mid-19, net profit was + 6.69% compared with the same period last year, indicating that the synergy generated by the acquisition of MMRO has begun to appear.

The company is facing the blue ocean market, technology plus research and development to promote long-term growth

The company's business scope mainly covers two major businesses: equipment development and support, aviation maintenance and service. we believe that there are three major driving factors for the company's development: first, the market space is vast, and the industrial market space of the company is more than 10 billion US dollars. there are few domestic competitors of the same type. in addition, overseas acquisitions have improved the company's layout in the field of aviation maintenance, and the company will have more room for development. Second, the company's R & D strength is strong, and the R & D investment has increased year by year, and it is now the leading flight parameter recording system and the first health management and monitoring system (HUMS) supplier for aircraft identification, and has become one of the few domestic enterprises with airborne equipment ATE R & D and large-scale production capacity; third, the aviation industry is an important strategic industry in China, and the national policy will help the company's business development.

The acquisition of overseas companies to improve the layout of the aviation maintenance field, the introduction of war funds to support the company completed the Magnetic MRO AS and DIRECT MAINTENANCEHOLDING B.V. In 2018 and 2019. The acquisition of two companies. The acquisition of the former aims to improve the company's layout in the field of aviation maintenance, further expanding from the original airborne equipment maintenance business to base maintenance, route maintenance, aircraft interior decoration and external painting, etc.; the acquisition of the latter is aimed at supporting the rapid development of subsidiary MMRO into a leading independent third-party route maintenance company in Europe, while docking the company's domestic market resources to achieve coordinated development. We believe that the company's overseas acquisitions will enhance the company's position in the international market and improve the company's layout in the industrial chain. at the same time, geographical dispersion will also help to reduce operational risks. In addition, the company introduced Beijing Kaiyuan Guochuang Hengyu Asset Management Co., Ltd. as a strategic investor in July 2018, aiming to get support from both capital and project, so as to enhance the value of the company. We expect that Kaiyuan's capital advantage of creating constant reputation will boost the development of the company, and at the same time, the development of the company will also bring satisfactory returns to investors.

Profit forecast and investment advice: we estimate that the company's annual operating income in 19-20-21 will be 1.172 billion yuan, respectively, with a corresponding growth rate of 55.36%, 20.12%, 17.96%, and 1.13, 1.54, respectively, with a corresponding growth rate of 124.58%, 36.64% and 25.89%, respectively, with a corresponding growth rate of 17.96%, 1.13%, 1.54% and 25.89%, respectively, with a corresponding growth rate of 55.36%, 20.12%, 17.96% and 1.13%, respectively. On 19-20-21, the annual EPS was 0.47, 0.64 and 0.81 yuan per share, respectively, and the corresponding closing price on September 6 was 42.12, 30.83, and 24.49x, respectively. As the leader of aviation maintenance industry, the average E value of comparable company is 60.58x, and the target price is 28.47 yuan according to our expected EPS value of 0.47 yuan per share in 2019. At present, the company's stock price is 19.83 yuan, which is undervalued and is given a buy rating for the first time.

Risk hint: the business development of overseas subsidiaries is not as expected, the synergy between parent and subsidiary companies is not as expected, the progress of product research and development is slow, and the growth rate of the aviation industry