AVIC Shen Fei (600760): Balanced production in Q1 2019 to support growth continues to be optimistic about mass production of new fighters
Event: The company released the first quarter report for 2019 and the first quarter report for 2019, and the company achieved revenue of 50.
850,000 yuan, an increase of 191 in ten years.
27%, net profit attributable to mothers1.
9.8 billion yuan, an increase of 2 from a loss of 18 in the previous quarter.
21 trillion, corresponding to 0 benefits.
14 yuan / share.
Opinion: Balanced production and other companies help the company’s revenue, and profits have increased significantly.
(1) Report that the company achieved revenue of 50.
850,000 yuan, an increase of 191 in ten years.
27%, accounting for 25 of the full year 2018 revenue.
23%, mainly benefited from: ① the company’s consolidated balanced production strategy and the increase in sales volume in the current period; ② advance receipts of previous contracts are recognized in the current period as the product is delivered, and the book value of advance receipts at the end of the reporting period is 75.
930,000 yuan, a decrease of 20 from the fourth quarter of the previous quarter.
00%, while the same period last year only decreased by 2 compared with the previous month.
(2) Realize net profit attributable to mother 1.
98 trillion, the earlier 18Q1 turned losses into profits, an increase of 2.
21 trillion, accounting for 26 of the net profit initially attributed to mothers in 2018.
65%, mainly due to the increase in revenue, but also benefited from: ① increase in gross profit margin increased by 0.
85pt; ② the reduction of the expense ratio during the period 4.
3pt, or the company’s advanced technology application and smart manufacturing production model pilot construction continued to bear fruit.
(3) The book value of prepaid accounts at the end of the reporting period increased by 25 from the previous quarter.
31%, indicating that the company is still expanding the scale of procurement downstream.
The carrying amount of inventory at the end of 2018Q4 was 97.
700,000 yuan, an increase of 23 from the beginning of the year.
37%; book value of work in progress is 77.
70 trillion, an increase of 37 earlier.
69%; book value of raw materials 19.
US $ 9.6 billion, mainly for production, and the inventory of delivered product reserves increased by 11 earlier.
07%, indicating that some products have formed output value but have not yet been delivered.
The company’s aviation product production is expected to maintain a good momentum, and gradually achieve achievements to achieve stable growth.
The company is an important R & D and production base for military fighters and will continue to benefit from the peak of military aircraft 淡水桑拿网 installations.
Shenfei Group is known as “the cradle of Chinese fighter jets”. Since the founding of the People’s Republic of China, it has been insisting on this mission of key aviation defense equipment. It is a famous assembly plant such as J-15, J-16 and J-31.
At present, driven by the increasingly severe national defense security and geopolitical situation, and driven by the requirements of building a strong military that meets the national strategic requirements, military expenditures are now accelerating.
The budget for defense spending in 2019 is 1.
19 trillion, an annual increase of 7.
50% higher than the GDP growth of 6% -6 in 2019.
In the future, it is expected that military expenditures will continue to grow and increase steadily at a higher growth rate. Aviation military equipment supporting weapons and equipment that is the state’s key support will continue to accelerate the installation.
Benchmark the inter-generational composition structure of American fighters, and consider the domestic replacement and installation requirements for third and fourth generation aircraft. In the next 10-15 years, the army’s demand for various types of fighters including Shen Fei and Cheng Fei is expected to exceed 1,000.
We believe that the huge objective demand is expected to improve the company’s existing continuous mass production and new models of fighters will usher in stereotypes and volume, which will promote the company’s continued rapid growth in revenue.
The wave of restructuring of military enterprises has injected new vitality into equity incentives.
On May 15, 2018, the company issued a long-term stock incentive plan. On October 18, the incentive plan was approved by the SASAC.
According to the revised implementation measures, the company this time to the company’s senior management, directors and technical backbone of a total of 80 subjects to 22.
The price of 53 yuan / share was awarded a total of 317.
10,000 shares of stock.
The forthcoming equity incentive plan will further improve the corporate legal person governance structure, promote the establishment of the company, improve the distribution mechanism that combines incentives and constraints, fully mobilize the enthusiasm of the company’s directors, senior management and key employees, and effectively bring shareholders’ interests to the company.The combination of the interests and the personal interests of the operators will help improve the company’s management level, promote the rapid improvement of the company’s operating performance, and ensure the smooth realization of the company’s long-term development goals.
The reform of the military product pricing mechanism has driven the company’s development, and its profitability is expected to continue to improve.
With the advancement of the reform of the pricing mechanism of military products, the 5% profit cap is loosened, which is beneficial to the machine manufacturers whose net profit margin has been improved.
Combined with international experience, the net profit margin of the whole company is expected to increase from the current 2-4% to 5% -8%, and the profitability will potentially increase the space barrier. As an assembly company, the company will benefit from the reform of the military pricing mechanism.
Earnings forecast and rating: Our 2019/20/21 EPS forecast is 0.
85 yuan, corresponding to the PE of 51/41 / 36X in 2019/20/21, giving the company a “strong recommendation” rating.
Risk reminder: The military aircraft is not installed as expected, and the military expenditure is structurally adjusted.