Core ideas:
1. Event
On March 11, Chengdu Aerospace, a wholly-owned subsidiary, received the qualification Certificate of equipment contractor issued by relevant departments and obtained the qualification of Class An equipment contractor, which is valid until 2024. 01.
two。 Our analysis and judgment
(1) to be qualified for equipment contracting and the ability to develop military products has been recognized.
Chengdu Aerospace, a subsidiary, has obtained the qualification Certificate of equipment contractor, which indicates that its R & D capability and technical level have reached the standard of military equipment procurement, and it is qualified to contract relevant military business. it is of great significance for it to enter the relevant military market and its future development. We believe that with the landing of equipment manufacturing qualifications, market concerns about the company's military production capacity are expected to be resolved, and the company's military business development space will be gradually opened.
In addition, the company recently announced two contract orders for turbine blades, totaling about 13.61 million yuan. Although the order amount is small, it is enough to reflect the competitiveness and future development potential of the company's products. Chengdu Aerospace is a potentially important private supplier of domestic aero-engines and blades, with a strong talent team, high technical barriers and development potential. With the stereotyping and mass production of domestic key mainframe models, the military business will expand and help the company to grow rapidly.
(2) merger and acquisition of Gardner and NAL to speed up the layout of the aviation industry chain
The company completed the merger and acquisition of shares in Gardner and NAL100% in June 2017 and July 2018, respectively. The former is a large multinational enterprise of advanced aerospace parts production and system integration in Europe, and it is a first-class supplier to Airbus and Luo Luo, while the latter is mainly engaged in wing structure manufacturing and is a key strategic supplier to Airbus. According to the announcement, Airbus promised to give new orders with a total value of not less than 400 million pounds within five years after the completion of the NAL merger (before 2023). The company's market competitiveness and profitability are expected to be greatly improved, and the goodwill impairment risk is significantly reduced. Gardner is expected to contribute about $200 million in net profit in 2019. With the large-scale commercial use of domestic large aircraft, Gardner and NAL, as traditional aircraft suppliers, will help the company to take the lead in the future development of the industry.
(3) large logistics drones enter the performance release period.
According to the announcement, the AT200 freight drone of Longxing UAV, a holding subsidiary, has entered the trial operation stage of the cargo transport route. SF Holdings, as the user of cargo drones, is committed to purchasing no less than 50 aircraft on the premise of meeting SF design needs and the safety and reliability of the aircraft itself. Therefore, we believe that with the acquisition of follow-up airworthiness certificates, orders for this type of UAV are expected to land around 2020 and continue to contribute profits.
3. Investment suggestion
It is estimated that the company's net return profit from 2018 to 2020 is 21 million, 182 million and 294 million respectively, and the EPS is 0.03,0.27 and 0.44 yuan respectively. The current stock price corresponds to PE of 470x, 54x and 33x. The company is highly scarce, benefiting from the great development of the domestic aviation industry, broad prospects, upgraded to the "recommended" rating.
Risk Tip: Gardner performance below expectations and goodwill impairment risk.
