AVIC Aircraft (000768): Steady, Far-reaching Quality and Efficiency
Key points of the report The event describes the company’s release of the 2018 annual report, reporting that the two companies achieved operating income of 334.
68 ppm, an increase of 7 per year.
69%; realized net profit attributable to mother 5.
58 ppm, an increase of 18 per year.
38%; net profit after deduction to mother 5.
29 ppm, an increase of 57 per year.
Incident review The company maintains a stable operation, and “improving quality and efficiency” leads to better performance.
At the core of the report, the company achieved operating income of 334.
68 million, 108 of the annual plan completed.
66%, an annual increase of 7.
69%, always maintaining a sound business.
The company promotes “improving quality and increasing efficiency”, during which period expenses account for 5% of operating income.
71% dropped to 4.
02%, of which sales expenses, which accounted for the highest proportion of sales expenses, decreased by 36 each year.
75%, employee compensation, which accounted for the highest proportion of management expenses, decreased by 6.
2%, research and development costs due to new turboprop regional aircraft development projects and other self-financed projects reduced by 51%.
The impact of the increase in the proportion of income from the period expenses and the increase in the combined exchange income caused the company’s operating profit to increase with the decline in gross profit margin.
We believe that it is possible to ship -20, 8/9 special aircraft and other important Air Force equipment, as well as mass production of key models, and the company’s performance is expected to maintain steady growth.
Product structure may affect gross profit margin, and there is huge room for improvement in future net 北京夜网 profit margin.
Or due to changes in the structure of the products produced and delivered, the company’s gross profit margin has declined since July 2017.
26% fluorinated to 6.
10%, of which the gross profit margin of the main aviation industry decreased significantly, from July 17th.
38% reformed to 5.
At the same time, the increase in raw materials due to changes in the international environment may have a certain impact on the company’s international subcontracting business, and the elderly also have an impact on the overall gross profit margin.
The company’s current net profit1.
52%, the highest level in history; the company’s net profit in 2017 reset 1.
53%, compared with Inner Mongolia First Machine, AVIC Shenfei and other OEMs, and the net profit margin is relatively high.
We believe that through the implementation of the reform of the military pricing mechanism, as well as the promotion of “balanced production”, “improving quality and efficiency” and the company’s gradual control of operating costs in the future, the company’s net profit margin will continue to increase.
Investment suggestion: The company is an advanced production base for large and medium-sized military and civilian aircraft in developing countries. It is expected to continue to benefit from the strategic transformation of the Air Force and the strong demand for the future civilian product market. We are optimistic about the company’s future development. It is expected that the company’s EPS in 2019-2021 will be 0.
23 yuan, 0.
28 yuan, 0.
32 yuan, corresponding to 74 for PE.
37X and 53.80X, maintain “Buy” rating.
Risk Warning: 1.
Air Force equipment procurement was less than expected; 2.
The cost control is less than expected; 3.
Product delivery was less than expected.