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AVIC Mechanical & Electrical (002013): Long-term performance remains stable and broad future development space

AVIC Mechanical & Electrical (002013): Long-term performance remains stable and broad future development space

Event: The company released its 2018 annual report.

The operating income in 2018 was 116.

37 ppm, an increase of 4 per year.

08%, realizing net profit attributable to mother 8.

37 ppm, an increase of 16 in ten years.

49%.

The business focuses on aviation products, and its long-term performance has grown steadily.

The company achieved operating income of 116 in 2018.

3.7 billion (+4.

08%) and a total profit of 10.

8.7 billion (+11.

76%), with a combined gross margin of 26.

30%, increase by 0 every year.

13 points.

(1) Revenue: Benefiting from the expansion of the military aviation and defense products market, aviation products achieved revenue of 75%.

93 ppm, a ten-year increase6.

9%; affected by fluctuations in the downstream automotive market, non-aeronautical products realized revenue.

75 trillion with zero digits.

9%; income from modern service industry and other businesses 2.

69 ppm, an increase of 0 in ten years.

9%.

(2) Profit: In 2018, the company realized net profit attributable to its mother.

37 ppm, an increase of 16 per year.

49%: The company issued 21 trillion convertible bonds, and the financial expense ratio decreased by 0 compared with the same period last year.

56 points; report returns for investment income of 0.

47 ppm, an increase of 0 per year.

US $ 4.4 billion, mainly due to investment income from disposal of long-term equity investments.

Leading domestic aviation mechanical and electrical products, the military and civilian markets have huge room for growth.

The company is the only company in China that has the ability to produce military aircraft electromechanical systems. Electromechanical products have absolute advantages in the market.

Existing military aircraft and civilian aircraft are facing a large number of installation, replacement and maintenance needs. It is estimated that the market size of military aircraft electromechanical systems in the next 10 years will be about 235.

US $ 200 million. In the next 20 years, the market space of domestic civil aircraft electromechanical systems will reach US $ 150 billion. As the main manufacturer of domestic electromechanical system products, the company will have a huge market space in the field of supporting mechanical and electrical products in the future.

Actively promoting asset integration is expected to inject assets into high-quality scientific research institutes.

The company is a professional integration and industrialization development platform for the electromechanical system business affiliated to the Aviation Industry Group. It has gradually acquired assets through various means. In 2018, it completed the acquisition of Singapore Airlines Group and Yibin Sanjiang. The number of holding subsidiaries reached 12.
At present, the company has 8 trusteeship units including Jincheng Nanjing Electromechanical and Hydraulic Engineering Research Center, Aerospace Lifesaving Equipment Co., Ltd., and the transformation of scientific research institutes is gradually promoted, and the company’s asset integration will be accelerated in the future.

Profit forecast and investment advice: It is estimated that from 2019 to 2021, the EPS under the current equity will be 0.

27 yuan, 0.

32 yuan and 0.

38 yuan, corresponding to the current sustainable PE of 27, 20, 17 times, maintain “Buy” rating. Risk warning: the risk of lowering gross profit margin of aviation products; asset injections 武汉夜网论坛 are less than expected.