Military industry review: related deposits to increase large orders or landing industry development high certainty again verified

2022-07-29 0 By

On March 28, AVIC SAC announced that it expects related procurement of 26.346 billion yuan in 2022, an increase of 42% compared with the actual amount in 2021.22Q1 is expected to realize the mother’s net profit of 509 million yuan, a year-on-year growth of about 47.5%;Avic Xiac announced that it will increase the related deposit limit from 14 billion yuan to 75 billion yuan in 2022, which may indicate that the company is expected to accept advance payments brought by large orders. The high certainty of industry development has been verified again.The “14th Five-year Plan” is the unprecedented golden development period of military industry, its growth and long-term development of high certainty is being continuously verified, stage adjustment will not change the industry’s high prosperity, will not change its long-term positive trend.Avic SAC expects related procurement to increase by 42% in 2022, and 22Q1, focusing on the main business, is expected to increase by 47.5%.On March 28, AVIC SAC announced that it expects daily related transactions of 59.978 billion yuan in 2022, of which 26.346 billion yuan is purchased for goods and services, an increase of 42.00% compared with the actual amount in 2021.The increase of related procurement may indicate that the company’s orders are relatively full and business prosperity continues to be high.According to the company’s performance forecast, 2022Q1 company fully focus on the main responsibility of the main business, operating revenue is expected to increase about 29.00% year on year, is expected to realize the ascribable parent net profit of about 509 million yuan, up about 47.50% year on year, is expected to achieve non-deduction net profit of about 459 million yuan, up about 58.67% year on year,To complete the annual production and operation of high-quality tasks to lay a solid foundation.Cnac xifei significantly increased deposit limits, or a sign that large orders are coming.Avic West Flight announced on March 28 that the company and its subsidiaries and aviation industry finance in 2022 financial business quota will be substantially pre-adjusted.The maximum deposit limit was raised by 436 percent from 14 billion yuan to 75 billion yuan.In March 2021, AVIC SAC announced that the deposit in the related party’s financial company is expected to be significantly increased to 50 billion yuan;In the mid-term report of 2021, the contractual liabilities of AVIC Sac increased by 697.93% to 37.737 billion yuan compared with the beginning, and the advance payment increased significantly.Referring to the experience of AVIC Shenyang, we believe that the substantial increase in the deposit limit indicates that the company is expected to receive advance payments brought by large orders.As the leading enterprise of large aircraft industry for military and civil use, its landing of large orders will verify the high certainty of long-term development of the industry.The industry ushered in a golden period of development, growth continued to verify.The “14th Five-year Plan” is an unprecedented golden period of development for the military industry. Its growth and long-term development of high certainty are being continuously verified. The main line of investment in the industry has also shifted from the “thematic investment” in the early stage to the “fundamental driven”.In recent years, the industry trend is gradually clear, the core military enterprises have for three consecutive years the overall net profit growth rate of 20%+, and is expected to continue to speed up during the “14th five-year plan”.42 core enterprises have released 2021 performance forecast or express, the overall net profit growth range of 45.3%-54.4%, including 36 upstream net profit growth range of 53.8%-64.4%.At the same time, in the early stage, AVIC Shenyang Aircraft, Air development power and other oems and air development control and other subsystem companies have announced a substantial increase in advance receivability, and both state-owned and private enterprises are actively promoting financing expansion, which has verified that the industry has long-term order support, long-term development of high certainty.Risk factors: policy support for civil-military integration is lower than expected;The reform of state-owned enterprises in the military industry has been slower than expected.Investment strategy: the “14th Five-year Plan” is the unprecedented golden development period of military industry, the stage adjustment will not change the high prosperity of the industry, nor will it change its long-term positive trend.At present, the overall valuation of the military industry has fallen back to nearly 30% quantile in the past five years, and the 22-year valuation of most core upstream targets is only 30-35 times. The growth rate of this year and next two years is expected to maintain around 45%.Although the short-term rebound space of the industry is still expected to be affected by the market style and overall risk appetite, but after the overall stability has been allocated value.Related targets include: (1) Aviation industry chain: Recommended AVIC Heavy Machinery, Tunan Shares, suggested to pay attention to Parker New Material, Fushun Special Steel;(2) Missiles: Purple Light Guowei and Filihua are recommended, and xinlei Neng is recommended;(3) Military electronics: Recommend Zhenhua Technology, AVIC Optoelectronics, 712, Torch electronics;(4) Military aircraft: Recommend Elada, Zhongjian Science and Technology, Guangwei Composite, and suggest to pay attention to AVIC High-tech.(Credit: CITIC Securities)