Incidents:
The company announced its 2022 annual report: In 2022, the company achieved operating income of 1,115 million yuan, an increase of 16.96% over the previous year; the net profit of the mother was 244 million yuan, an increase of 5.55% over the previous year; after deduction, the net profit of the mother was 203 million yuan, an increase of 1.32% over the previous year.
Comment:
The aviation and refrigeration industry achieved steady growth. By business, 1) Aviation product revenue in 2022 was 730 million yuan, +21.88% year on year. In 2022, new aviation equipment products and new markets all achieved major breakthroughs. Military aviation successfully supplied various new research projects with airborne fuel tank inerting protection systems, oxygen supply systems and other products. The civil aviation sector obtained additional airworthiness documents from PMA in September 2022, and the sensitive components business actively occupied new market fields such as aero engines, and developed 15 new products. 2) Special refrigeration equipment revenue was 247 million yuan, +6.61% year on year. The refrigeration business has achieved full military coverage, and civilian equipment has been continuously developed, focusing on developing market segments such as special high temperature resistant air conditioners for industrial use and air conditioners for special vehicles. In 2022, the company successfully won a bid for a weapon environmental control system project, achieving the transformation from a single equipment supplier to an environmental control system integrator. 3) Maintenance and other business revenue was 138 million yuan, +12.44% year on year.
Gross profit margins and net interest rates declined slightly, and investment in R&D increased. On the gross profit side, the company's gross profit margin in 2022 was 40.23%, -3.37pct over the previous year, mainly due to product restructuring and price increases for some raw materials.
On the profit side, the net interest rate returned to the mother in 2022 was 21.88%, -2.37pct year on year, a slight decline. On the cost side, the sales/management/R&D/finance expense ratio in 2022 was 2.50/12.69/7.17/ -2.07%, compared to -0.05/-1.43/+1.81/-0.13pct. The reduction in the management cost rate is mainly due to the improvement in management efficiency. In 2022, the company's R&D expenses reached 80 million yuan, +56.53% over the same period last year, and R&D investment increased markedly.
Related transactions indicate that sentiment will remain at a high level. The number of related transactions between the company and the aviation industry and its affiliated units in 2022 was 696 million yuan, accounting for 62.5% of the company's total revenue. The company expects the volume of related transactions with the aviation industry and its affiliated units to be 950 million yuan in 2023. Compared with the actual value in 2022 +36.44%, the industry chain sentiment will remain at a high level.
Investment advice: The company's revenue for 2023-2025 is estimated to be 1,354/1660/2,052 billion yuan respectively, net profit of 296/363/452 million yuan, corresponding to EPS of 0.52/0.64/0.80, corresponding to PE34.21/27.95/22.43X, and the “increase in holdings” rating for the first time.
Risk warning: Market development falls short of expectations, order fluctuations, and performance and valuation judgments fall short of expectations.