Main points of investment
Events:
Citic Haizhi released its annual report for 2020, with an annual operating income of 1.558 billion yuan, down 0.57% from the same period last year, and a net profit of 218 million yuan, an increase of 3.26% over the same period last year.
Comments:
The navigation business has been optimized and the net profit has reached a new high. The gross profit margin and net profit margin of the company's navigation business rose again, reaching 29.0% and 13.7% respectively, the best level since the 2016 annual report. On the revenue side, although the volume of navigation business declined in 2020 and flight time decreased by 5.48%, the company actively optimized the contract aircraft models of offshore oil business, driving an increase in average hourly flight revenue, and revenue only decreased by 0.57% compared with the same period last year.
From the cost point of view, labor costs decreased by 6.49%, and aviation materials and aviation fuel costs decreased by 12.55%.
CNOOC issued the 2021 business plan to support the stability of the company's performance. CNOOC is the company's largest customer, accounting for 66.7% of total sales in 2020. According to CNOOC's business plan, CNOOC plans to drill 217 exploration wells in 2021. The total capital expenditure budget is 90-100 billion yuan, which is higher than that of last year's budget center. It is expected that the steady development of CNOOC's exploration and development business will continue to support the company's performance and achieve a steady increase in revenue.
It is planned to control the navigation of Huaxia Jiuzhou, which will continue to diversify and transform. The company announced on March 24 that it intends to acquire a 51% stake in Huaxia Kyushu General Aviation Co., Ltd. through public delisting, with the layout of emergency rescue, navigation maintenance and training, R & D and manufacturing of PMA parts and the promotion of domestic civil aircraft in Jiangxi Province and its surrounding areas, so as to continue to promote the diversified transformation of the company's business structure.
Non-public offerings will broaden financing channels, and financial costs will continue to decline. According to the announcement, the company has been approved for a non-public offering, and the optimization of the asset structure will further reduce the financial cost.
Investment strategy: the company continues to cultivate in the field of navigation, performance, business types, fleet size are in the leading position in the industry, the domestic offshore oil market share remains the first. Looking forward to the future, offshore oil navigation business is making steady progress, and diversified services such as maintenance and training have growth potential. It is estimated that the eps of the company from 2021 to 2023 will be 0.32,0.35,0.39 yuan respectively, corresponding to the PE of 21.8,20.0,17.8 times on March 30, respectively, maintaining a prudent overweight rating.
Risk hints: fluctuations in international oil prices, lower-than-expected navigation policies, etc.