Main points of investment:
AVIC High-tech released the third quarterly report of 2023 on October 23, realizing operating income of 3.623 billion yuan in the first three quarters, with a year-on-year growth of 7.69%; net profit attributable to shareholders of listed companies of 844 million yuan, with a year-on-year growth of 25.84%; basic earnings per share of 0.61 yuan.
The third quarterly report grew steadily, and the performance accelerated month-on-month. The net profit of Q3 quarter increased by 50.06%. In the third quarterly report of 2023, the Company realized operating income of RMB 3.623 billion yuan, with a year-on-year growth of 7.69%; the net profit attributable to parent company was RMB 844 million yuan, with a year-on-year growth of 25.84%; the net profit deducted from non-profit was RMB 801 million yuan, with a year-on-year growth of 22.04%.
Among them, the operating income in the third quarter was 1.21 billion yuan, with a year-on-year growth of 13.67%; the net profit attributable to the parent company was 293 million yuan, with a year-on-year growth of 50.06%; the net profit deducted from non-profit was 260 million yuan, with a year-on-year growth of 39.9%.
In 2023, the growth rate of operating income in three quarters of the Company was 8.36%, 1.47% and 13.67% respectively; the growth rate of net profit attributable to parent company was 14.91%, 17.45% and 50.06% respectively; and the growth rate of net profit deducted from non-profit was 13.15%, 17.91% and 39.9% respectively. The performance has accelerated every quarter. Q3 net profit increased by more than 50% in a single quarter.
The aviation composite business grew steadily, and the machine tool business reduced losses significantly.
In the third quarter of 2023, the core business aviation new materials realized operating revenue of RMB 3.552 billion yuan, with a year-on-year growth of 6.97%, mainly due to the sales growth of aviation composite material raw materials products and brake products; the operating revenue of machine tool equipment was RMB 43.4507 million yuan, with a year-on-year growth of 17.50%, mainly due to the year-on-year growth of special equipment and aviation parts processing business.
From the perspective of net profit composition: 1. The aviation new material business realized a net profit attributable to shareholders of listed companies of RMB 862 million yuan, with a year-on-year growth of 21.49%. The company strengthened cost control and management, which promoted the comprehensive gross profit rate to increase year-on-year;2. The machine tool equipment business realized a net profit attributable to the parent company of RMB-19,729,600 yuan, with a year-on-year loss reduction of RMB 9,860,300 yuan. The main reason for the loss reduction was the increase of comprehensive gross profit contribution due to the change of business structure and the decrease of labor cost due to the reduction of redundant personnel; 3. The investment income increased by 29,628,200 yuan in the statement items of Beijing Airlines Biology in this period.
The company strengthens cost control and steadily improves profitability
In the third quarter of 2023, the gross profit margin of the Company was 37.44%, up 4.46% compared with the same period; the net interest rate was 23.43%, up 3.54% year-on-year; and the weighted ROE was 14.7%, up 1.52% year-on-year.
The company's sales, management, R & D and financial expense ratios were 0.6%, 7.11%, 3.16% and-0.58%, respectively, up 0.01%, 0.55%, 0.65%, 0.03% year-on-year respectively. The company strengthened cost control, the gross profit rate increased by 4.4 points, the expense ratio remained stable, and the net profit rate increased by 3.54 percentage points.
2023 business target guidance aviation composite total profit growth of 34.2% The company's 2023 business target shows that 2023 is expected to achieve operating income of 4.9 billion yuan, total profit of 1.176 billion yuan. (1) The aviation new materials business strives to achieve an operating income of 4.862 billion yuan and a total profit of 1.296 billion yuan. The company's business objectives in the past three years have basically been successfully completed, and the realization rate is relatively high.
From 2020 to 2022, the planned realization rates of operating income of the Company are 100.41%, 100.21% and 98.8% respectively, and the planned realization rates of total profit are 129%, 96.72% and 100.11% respectively.
According to the guidance of the company's business objectives in 2023, the company's operating income in 2023 is expected to increase by 10.21%, and the total profit is expected to increase by 31.54%; among them, the operating income of aviation composite materials is expected to increase by 14.16%, and the total profit is expected to increase by 34.2%, which is significantly higher than that in 2022 (20.6%), indicating that the company has strong confidence in the operation in 2023.
The penetration of composite materials for national defense industry and domestic large aircraft has accelerated, and the company's performance has continued to grow strongly. AVIC High-tech is the aviation composite materials listing platform under AVIC Group. It is the core supplier of aviation composite prepreg. It has the advantageous resources such as R & D, production and market in the field of composite materials of AVIC Group. It has inherited the production technology of aviation composite raw materials accumulated by the aviation industry for many years. A complete composite material "design-material-manufacturing-testing" integrated scientific research and production technology system has been established.
In 2023, the Company vigorously promoted the verification of new prepreg production lines and improved production capacity. Two prepreg production lines newly built in a park in Shunyi District of Beijing City have reached stable production status and achieved designed production capacity.
In recent years, with the continuous development of China's defense science and technology industry and other fields of national economy, the demand for high-performance fibers and composites in China continues to grow rapidly. The demand for aviation composite materials in aviation equipment continues to grow, while cutting into missiles and other weapons and equipment. At the same time, with the gradual landing of domestic large aircraft projects, the application space of aviation composite materials on domestic large aircraft has been opened. The company's performance growth is sustained.
Profit forecast and rating
We predict that the company's operating income from 2023 to 2025 will be 5.095 billion, 6.183 billion and 7.399 billion respectively, and the net profit from parent company will be 1.037 billion, 1.342 billion and 1.651 billion respectively. According to the closing price on October 25, 2023, the corresponding PE will be 33.41X, 25.82X and 20.98X respectively. The compound growth rate in the next three years is expected to reach nearly 30%. The company's valuation is reasonable, matching the growth rate of performance in the next few years, and continues to maintain the "buy" rating.
Risk warning: 1: military aircraft demand, delivery progress is less than expected;2: defense expenditure budget growth is less than expected;3: raw material prices rise;4: industry competition intensifies;5: other main business losses may expand.