Main points of investment
The company is a domestic high-quality aviation materials distributor, aviation materials distribution and self-developed products two-wheel drive company growth. Runbei Aviation Division, founded in 2005, is a leading integrated service provider of aviation materials solutions in China, providing aircraft materials to more than 1800 customers around the world. At present, the company's business is driven by two-wheel drive of aviation materials distribution and self-developed products, including aviation fuel, aviation raw materials and other consumables, aviation chemicals and ground support equipment, etc.; self-developed products include tape, cleaning agent, disinfectant, interior wallpaper, pilot headphones, ground headphones, etc., which can be used to equivalent replace imported aviation materials on Boeing Co and Airbus aircraft operated in China.
Aviation materials distribution is positively related to the prosperity of the civil aviation industry, and the aviation materials distribution business is expected to grow rapidly in 2023. The company is an important link between the upstream and downstream of the aviation materials industry chain, and the aviation materials distribution business is positively related to the prosperity of the civil aviation industry. 2023Q1, China's civil aviation industry completed a total transport turnover of 23.99 billion ton / km, an increase of 40% over the same period last year; the company achieved revenue of 162 million yuan, an increase of 32% over the same period last year. 2023H1, China's civil aviation industry completed a total transport turnover of 53.13 billion ton / km, an increase of 81% over the same period last year. Thanks to the recovery of civil aviation shipping, the company's performance is expected to grow rapidly.
Self-research products to maintain a rapid growth rate, fund-raising projects to significantly increase production capacity. The company began to lay out the domestic aviation materials earlier, and the variety of products is becoming more and more abundant. By the end of 2022, 82 kinds of domestically developed products have passed various airworthiness certifications of the Civil Aviation Administration of China, which can be used to replace the imported aviation materials on Boeing Co and Airbus aircraft operated in China. In addition, some of the products of Runhe New Materials, a subsidiary of the company, have been included in the Comac Standard Materials Manual. In 2022, the company's revenue from self-research products was 36.8028 million yuan, an increase of 46.52% over the same period last year. The company's IPO investment project "Guangdong Runhe New Materials Co., Ltd. Aviation non-metallic materials, composite materials, aviation cleaning products production base new project" will build 4 new production lines to enhance the large-scale production capacity of self-developed products to meet the downstream customers' needs for the localization of aviation materials. At present, the factory has entered the stage of equipment procurement and is expected to gradually put into production in the fourth quarter of this year.
The second C919 is delivered to China Eastern Airlines, and the company is expected to fully benefit from the accelerated pace of production and delivery of large domestic aircraft. By the end of July 2023, the first C919 had served more than 15000 passengers. On August 4, 2023, the two domestic large passenger aircraft C919 received by China Eastern Airlines started "dual-aircraft commercial operation" for the first time, and the commercial operation of C919 moved steadily to scale. According to Comac's June data, the C919 has received 1061 orders from more than 30 customers. Comac already has the capacity to mass produce C919 and will reach an annual production capacity of 30-50 aircraft in the next few years. With the accelerated pace of production and delivery of C919, the demand for aircraft materials in domestic large aircraft manufacturing is expected to increase significantly, and the company's air materials distribution business and self-made aviation materials business are expected to fully benefit.
Aviation materials distribution and self-developed products two-wheel drive company growth. Air materials distribution business is positively related to civil aviation prosperity. In 2023, with the resumption of domestic civil aviation shipping, the company's air materials distribution business is expected to grow rapidly; self-research business with the company's rich products, customer expansion, capacity construction, is expected to achieve faster growth. In addition, Comac is an important customer of the company, with sufficient orders for domestic large aircraft, and the company is expected to benefit from the acceleration of production and delivery of C919 aircraft.
We estimate that the company's net profit from 2023 to 2025 will be 1.11,1.45 and 183 million yuan respectively, and the corresponding share price PE will be 27,21 and 16 times respectively, maintaining the "overweight" rating.
Risk hint
The recovery of the domestic air transport industry is not as expected; the rise in procurement prices caused by exchange rate fluctuations and other factors; the development of self-produced business is not as expected; the development of domestic large aircraft is not as expected.