The only professional R & D and manufacturing base of aviation oxygen system in China
The company is mainly engaged in aviation equipment and special refrigeration two major businesses, the main products in the field of aviation equipment include aviation oxygen system, airborne fuel tank inerting protection system, aircraft auxiliary fuel tank, etc., to provide supporting products and services for major domestic mainframe factories and the military, supporting the supply of all domestic equipment demand for all in-research, in-service military aircraft as well as some civil aircraft. The special refrigeration business is carried out through Swan Refrigeration, a wholly-owned subsidiary. "Swan" brand is the earliest domestic window air conditioning and military air conditioning brand, which enjoys high brand awareness in the industry. Military special refrigeration equipment has achieved air force, army, navy, rocket army and other military coverage.
21Q1 revenue growth of 79%, profit growth of 72%, sustained high growth of 2020 revenue of 830 million yuan (+ 23.20%), return to the mother net profit of 194 million yuan (+ 71.31%).
21Q1 has a revenue of 189 million yuan (+ 78.83%) and a net profit of 44 million yuan (+ 71.53%). The company has benefited from the growth of aviation oxygen supply products and the revenue of special air-conditioning equipment brought about by the release of fighter jets. 21Q1 gross profit margin 47.72%, year-on-year increase of 3.41pct; net profit margin of 23.35%, down 1pct, aviation oxygen systems, refrigeration equipment and other high gross profit products are expected to still improve the company's gross profit margin and profitability.
Investment advice:
As the only professional R & D and manufacturing base of aviation oxygen system and airborne fuel tank inerting protection system in China, the company has benefited from the accelerated process of military aircraft, especially advanced fighter planes.
In addition, military special refrigeration equipment has achieved military-wide coverage, such as the Air, Army, Navy, Rocket Army, and so on, and is expected to grow rapidly in ships and other fields in the next three years. On the whole, the company has pure business, outstanding advantages in sub-areas, and the performance growth rate is also higher than the industry average. The company's net profit from 2021 to 2023 is expected to be 269 million yuan, 389 million yuan and 549 million yuan respectively, corresponding to PE 35X, 24x and 17x, giving a "buy" rating.
Risk hint: the volume of military business is not as expected; the expansion of civilian business is not as expected.