The company issued a pre-increase announcement on 21H1 performance, which is expected to achieve a net profit of RMB 1.05-109 million, an increase of 85% over the same period last year. 21Q2 is expected to achieve a net profit of RMB 0.58-62 million, an increase of 93.33%, 106.67% and 23.40%, respectively, compared with a month-on-month increase of 31.91%. The company is a leading manufacturer in the field of domestic aerospace manufacturing, with the full process manufacturing capacity of aviation parts, and is expected to fully benefit from the rapid expansion of China's aviation equipment and the continuous expansion of civil aircraft supporting demand. at the same time, the company actively arranges the field of intelligent manufacturing, and the growth space is expected to be further opened. Therefore, with reference to the comparable company valuation level and taking into account the company's industry position in the segment, maintain the company's "overweight" rating.

The performance increased significantly in the first half of 2021, and the profitability increased significantly. The company expects 21H1 to achieve a net profit of 1.05-109 million yuan, an increase of 85% over the same period last year. It is estimated that 21Q2 will achieve a net profit of RMB 0.58-62 million, an increase of 93.33%, 106.67% and 23.40%, respectively, compared with the same period last year. The company continues to focus on the main industry, expand the production capacity of CNC precision machining and special technology production lines, and cultivate the assembly capacity of large structural parts; benefiting from the strong demand downstream of China's military and civil aviation field, the company has full orders during the reporting period. the production capacity of the related processes of the layout has been released one after another, and revenue and profits have maintained a large increase compared with the same period last year.

The fixed increase plan has been approved by the exchange, and the layout of intelligent manufacturing to enhance the core competitiveness. The company announced that it intends to issue shares to specific targets, raising a total amount of no more than 500 million yuan for the "Aviation parts Intelligent Manufacturing Center".

Projects and supplementary liquidity. The structure of aviation parts is complex and the application materials are various. the implementation of intelligent manufacturing upgrade based on the new generation of information and artificial intelligence technology is expected to improve product performance, development quality, shorten manufacturing cycle and reduce manufacturing cost. The construction period of the project is 42 months. After completion, the company's production capacity and operation scale will be significantly expanded. The company expects to achieve an annual sales income of 234 million yuan and a net profit of 60.02 million yuan after reaching full production. In addition, the intelligent and flexible degree of the company's production line will also be significantly improved, and the core competitiveness of products is expected to be further improved. As of the announcement of the pre-increase in performance, the company's fixed increase plan has been examined and approved by the Shenzhen Stock Exchange.

Special process treatment is expected to become a new support point for performance, helping the company to upgrade the supporting level. In 2017, the company plans to introduce international advanced non-destructive testing and other special technological processes to open up the key links of the company from parts machine to parts assembly. as of December 31, 2019, the project has completed investment construction and has been put into use, but the settlement has not yet been carried out to form benefits. According to the company's analysis, it is estimated that the production line will achieve an annual operating income of 3760 million yuan / year and an annual net profit of 11.07 million yuan, which is expected to become a new supporting point for the company's performance. at the same time, the project also helps the company to upgrade the supporting level of "parts machine plus-> component assembly", and further open up the growth space of the company.

Risk factors: the growth of newly signed orders is not as expected; the development of new products is lower than expected; the fundraising progress of non-public offerings is lower than expected.

Investment suggestion: the company is the core supplier in the field of aviation spare parts machining in China, and is expected to fully benefit from the rapid release of aviation equipment and the continuous expansion of the demand for civil aircraft in the future. at the same time, the company actively arranges the field of intelligent manufacturing, and the growth space is expected to be further opened to maintain the company's annual net profit forecast of 1.94 PE in 2021-22-23. 350 million yuan, the current price corresponding to the current price of 350 million times respectively. Give the company 60 times PE in 2021, corresponding to the target price of 50 yuan, and maintain the "overweight" rating.