Summary of the report:
The company is an excellent supplier of aero-engine and gas turbine parts. The company's main business includes aero-engine and gas turbine parts. In 2020, affected by COVID-19 's epidemic situation, the company's foreign trade business income declined, with an annual operating income of 2.721 billion yuan, down 19.58% from the same period last year. The net profit returned to the mother was-16.03 million yuan, from profit to loss. In 2021, Q1, the company's orders gradually resumed, achieving operating income of 705 million yuan, up 54.67% over the same period last year; the net profit of returning to the mother was-25.2477 million yuan, with a year-on-year loss reduced.
The company mainly supplies aero-engine parts products, and there is no competition in the domestic market. The company's business is located in the whole machine manufacturing link and belongs to the second-class supplier in the aero-engine industry chain.
The production and processing of domestic trade aviation products in China are mainly distributed in a few aero-engine manufacturing enterprises. Based on the division of tasks, the company's domestic trade aviation and derivatives market share reached 100%. In 2020, the total import and export trade of China's aero-engine industry reached US $5.937 billion, with a deficit of US $3.442 billion, a decrease compared with the same period last year. With the domestic replacement of aero-engines, the company's domestic trade business is expected to continue to expand.
The company undertakes the commissioned processing business of international well-known aero-engine companies, and the product level continues to improve. In terms of foreign trade business. The company has grown into an important or even the only supplier to a number of world-renowned aero-engine companies in the Asia-Pacific region, and has established long-term cooperative relations with GE, RR, HON and other international well-known enterprises. In 2020, the company realized foreign trade business operating income of 955 million yuan, started 40 new products trial production for the whole year, planned to complete 33 items, and actually completed 40 items, with a completion rate of 121%. In the face of fierce competition in the field of foreign trade subcontracting, the serialization of key products and high-end product value are the future development direction of the company's business.
Investment suggestion: the company is expected to achieve revenue of 35.24,46.16 and 6.098 billion yuan from 2021 to 2023, and realize net profit of 0.61,1.28 and 183 million yuan respectively. PE 128.37 picks 61.53 EPS 43.13X, 0.19,0.39,0.55 yuan per share, covering for the first time and giving "overweight" rating.
Risk hints: intensified foreign trade competition, international technical restrictions, and the progress of domestic engine industrialization.
