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Zhongzhi shares (600038): A large number of orders to accelerate the release of internal and external operating environment to improve and thicken performance

Zhongzhi shares (600038): A large number of orders to accelerate the release of internal and external operating environment to improve and thicken performance

Event: The company released the first quarter performance report for 2019, realizing a net profit of RMB 78.79 million, an annual increase of 11.

5%; operating income 23.

870,000 yuan, an increase of 11 in ten years.

50%; net profit after deduction is 74.81 million, an annual increase of 15.

2%, performance is in line with expectations.

Opinion: The company’s revenue increased 11.

5%, mainly due to the continuous optimization of product structure and continuous release of production capacity.

And the contract (prepayments) increased by 44% to 5.4 billion, which further proves that the company has too many orders on hand and its production capacity continues to climb.

In addition, the company’s statements are expected to improve quarter by quarter by confirming revenue using the percentage of completion method.

Attributable net profit increased by 11.

5%, operating cash flow returned to positive, the company’s internal and external operating environment has improved significantly.

The company’s credit impairment rushed back to 12.11 million, and at the same time, interest income increased by 68% over the ten-year period of 11.2 million, showing that measures such as reducing fees and increasing efficiency have effectively improved the company’s internal operations.

At the same time, the company’s net operating cash flow1.

0 billion, 18 years -2.

The 9 billion improvement is obvious, showing that downstream customers are more standardized and orderly in payment and product delivery after the military reform, and the company’s external operating environment has improved.

The gap between the Chinese and US helicopter industries has narrowed, and the reform of the domestic military establishment has driven the industry demand ceiling to rise.

From a national perspective, 杭州桑拿网 compared to the US military aircraft industry, there is still room for improvement in terms of number and structure. Domestic demand for 10-ton medium-sized helicopters and heavy helicopters is huge.

Reform of the military establishment drives the demand for the helicopter industry to move upwards: 1) Army Aviation “has an organization and lacks equipment” brings certain demand (about 1100 helicopters); 2) The Navy “ship-based inorganic” + air assault battalion urgently needs nearly 300Compensation equipment; 3) The Air Force Airborne Division restructuring brigade was completed, and the replenishment of subordinate helicopter units was released.

The company’s product cycle and demand are perfectly matched. The CAGR in the next 3 years is expected to exceed 25%.

The company copied the development model of overseas 武汉夜生活网 giants, followed the development model of “one machine with multiple types” and the military and civilian product genealogy, and benchmarked Sikorsky, resulting in a huge demand for 10-ton general-purpose helicopters.The development model is expected to drive the company’s performance growth for many years. For the target Airbus, the company’s product line after the reorganization is rich, and the military and civilian market is “pedigree”. The growth potential is huge.

Maintain profit forecast and “Buy” rating.

It is estimated that the company’s revenue for 2019-2021 will be 16.9 billion / 20.8 / billion / 25.4 billion, and the net profit attributable to the mother will be 6.

6 billion / 8.

5 billion / 10.

6 billion, corresponding to the current duration (2019/4/26) and corresponding PE is 38/29/23 times, considering that there are still some core assets outside the company and military pricing reform or long-term benefits for military OEMs, it is expectedThe company’s future net profit elastic barrier, maintain “Buy” rating.

Risk warning: Aviation equipment procurement is less than expected.