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航发科技(600391)2020年报点评:内贸平稳 外贸受疫情和贸易摩擦影响

Comments on the Annual report of Aviation Development Technology (600391) 2020: the stability of domestic trade and foreign trade is affected by epidemic situation and trade friction.

中航證券 ·  Mar 30, 2021 00:00

Event: the company's 2020 operating income is 2.721 billion yuan (- 19.58%), net profit is-16.0263 million yuan (- 170.98%), gross profit is 10.86% (- 1.64pcts), net profit is 0.36% (- 0.77pcts).

The company's revenue target for 2021 is 3.507 billion yuan (+ 28.89%).

Main points of investment:

Affected by the epidemic, civil aircraft subcontracting dropped sharply, and its performance changed from profit to loss: affected by the epidemic, civil aircraft subcontracting orders dropped sharply. In 2020, the company turned from profit to loss compared with the same period last year, achieving an operating income of 2.721 billion yuan (- 19.58%) and a net profit of-16.0263 million yuan (- 170.98%). Deduct the non-return net profit of-44.4023 million yuan (- 2201.88%). Gross margin 10.86% (- 1.64pcts), net margin 0.36% (- 0.77pcts), ROE weighted-1.10% (- 2.66pcts). In terms of expenses: sales expenses (24.1631 million yuan) decreased by 25.00%, mainly affected by the epidemic; management expenses (161 million yuan) decreased by 2.18%; financial expenses (43.9568 million yuan) decreased by 40.68%, mainly due to the company's pressure reduction with interest liabilities, and interest expenses decreased compared with the same period last year; research and development expenses (65.5223 million yuan) decreased by 11.07%, accounting for 2.41% of revenue.

Business: the company's main business is aero-engine and gas turbine parts research and development, manufacturing, sales and services, including domestic trade aviation and derivative products, foreign trade subcontract products two business sectors, domestic trade aviation, foreign trade products, aviation bearing three major products. During the reporting period, domestic trade airlines achieved revenue of 1.673 billion yuan (- 3.71%) and gross profit margin of 12.91% (+ 1.74pcts), which was basically the same as that of the same period last year, indicating that the company's domestic trade performance remained stable. Foreign trade products achieved revenue of 955 million yuan (- 37.15%) and gross profit margin of 4.52% (- 8.53pcts), which was seriously affected by the international epidemic. Industrial civilian products achieved revenue of 56.7608 million yuan (- 36.83%) and gross profit margin of 11.06% (+ 11.67pcts). Due to focusing on the needs of the main business, the company has continued to shrink this part of the business volume in recent years.

As for subsidiaries, in 2020, the revenue and net profit of China Aviation Development Harbin Axle were 477 million yuan (+ 12.94%) and 51 million yuan (+ 63.43%) respectively, mainly due to the high added value of aviation bearings produced by the company. Fast realized revenue and net profit of 93 million yuan (+ 0.23%) and 10 million yuan (+ 96.30%) respectively.

In terms of assets, during the reporting period, the company's monetary capital was 506 million yuan (+ 94.97%), mainly due to the increase in contract payments received by the company in advance; inventory 2.519 billion yuan (+ 23.48%), accounting for 43.36% of total assets; accounts receivable and bills receivable 658 million (- 34.05%), accounting for 11.32% of total assets, mainly due to the sharp decline in subcontracting revenue this year, subcontracting accounts receivable decreased.

In terms of cash flow: the net cash flow generated by operating activities is 7.91 yuan (+ 1.67%); the net cash flow generated by investment activities is-150 million yuan (- 15.76%), mainly due to the purchase and construction of long-term assets such as fixed and intangible assets; the net cash flow generated by fund-raising activities is-36800 yuan (+ 43.01%), mainly due to the reduction of loan repayment in the current period.

Domestic trade and foreign trade products "two-wheel drive", constitute the company's long-term stable and balanced development pattern of domestic trade, the company's business volume and profitability remain stable. The production and processing of domestic trade aviation products in China mainly belongs to a few aero-engine production enterprises, there is no industry competition in the arrangement based on the division of tasks, and the relevant market share of the company is 100%. In 2020, the sales of the top five customers of the company were 1.794 billion yuan, accounting for 65.92% of the total annual sales, of which the related party sales of the top five customers were 1.212 billion yuan, accounting for 44.54% of the total annual sales.

Judging from the global transport turnover in recent years, the demand for commercial aero-engines in China will be increasing in the future. At the same time, with the national "two aircraft" major project promotion, as well as the strong demand for domestic replacement, the domestic aero-engine industry will usher in a new space for development, the company is expected to benefit.

In terms of foreign trade, the company's civil aero-engine and gas turbine parts products are mainly provided to some international well-known engine companies, and the subcontract business has a professional manufacturing platform for casing, blade, sheet metal and shaft products. In 2020, under the double unfavorable external environment of serious international epidemic and Sino-US trade friction, the company still basically stabilized the balanced development of subcontracting business strategically. In the whole year, 40 new product trial production projects were launched, 33 were planned to be completed, and 40 were actually completed, with a completion rate of 121%. Affected by the rise in domestic raw material prices and labor costs, superimposed by factors such as fierce competition in the market, in order to cope with the possibility that the profitability of foreign trade subcontracting will gradually decline in the future, the company is actively transforming and upgrading and will consolidate its traditional advantages. promote the serialization of key products and the high-end value of products.

Investment suggestion: as the main domestic aero-engine parts research and production enterprise, the company focuses on the development of domestic aviation and derivative products and foreign trade products, forming a long-term balanced development pattern. At present, the domestic trade aviation equipment undertaken by the company is urgently needed for the construction of aviation equipment, and the national power demand for aviation equipment is particularly urgent, so it is particularly important to realize the independent support and development of aero-engine as soon as possible. With the high-volume delivery of the series of products, the company will get more opportunities in the future development. Although the performance was adversely affected by the epidemic in 2020 from profit to loss, we believe that in the long run, the company's future performance will benefit from national policy-driven and strong industry demand to achieve stable and sustainable growth.

We predict that the net profit of the company in 2021, 2022 and 2023 will be 44 million yuan, 108 million yuan and 134 million yuan respectively, and the EPS will be 0.13,0.33,0.41 yuan respectively. The current stock price is 144.46 times, 56.91,45.80 times corresponding to the current stock price, with a "buy" rating and a target price of 24.00 yuan.

Risk tips: overseas markets due to the weakness of the epidemic, the risk of new product development, the risk of exchange rate fluctuations.

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