AVIC (002179) 2018 Annual Report Comments: The main business maintains stable growth, military-civilian integration is optimistic about the company’s future development prospects
Matters: The company released its 2018 annual report, which was included in the company’s operating income of 78.
16 ppm, an increase of 22 in ten years.
86%; realized net profit attributable to mother 9.
54 ppm, an increase of 15 in ten years.
56%, basic profit income 1.
22 yuan, the profit distribution plan is to pay a cash dividend of 1 for every 10 shares.
30 yuan (including tax), the capital reserve will be transferred to all shareholders for every 10 shares of 3 shares.
Opinion: The steady growth of the main business, the increase in the proportion of integrated products, and the substantial increase in inventory growth highlight the future development potential.
The company’s main business is connectors, with an initial revenue of 77.
20,000 yuan, an annual increase of 22.
77%, accounting for 98% of total income.
75%; of which electrical connector income is 40.
77 ‰, an increase of 9 in ten years.
52%, accounting for 52% of total income.
16%, gross profit margin 37.
02%, a slight decrease of 0 a year.
19%; revenue from optical devices and optoelectronic equipment 14.
9.3 billion, an annual increase of 33.
69%, accounting for 19% of total income.
1%, gross profit margin 22.
02%, a slight decrease of 0 a year.
45%; cable assembly and integrated products revenue 19.
24 ppm, an increase of 37 per year.
8%, accounting for 24% of total income.
61%, a further increase in the proportion, indicating that the company’s products have further expanded to the downstream system level, with a gross profit margin of 30.
79%, a decrease of 7 per year.
5%, we expect mainly due to the rapid growth of civilian new energy vehicle business, the corresponding gross profit margin is lower than military products.
Company Inventory 19.
65 ppm, an increase of 46 per year.
89%, of which 10 are in stock.
78 ppm, an increase of 52 in ten years.
9%, highlighting future development potential.
The proportion of research and development expenditure has further increased, and financial expenses have been significantly reduced by the increase in exchange rates.
Total company period expenses 14.
37 ppm, an increase of 16 per year.
4%; of which selling expenses 3.
600 million, an increase of 20 every year.
53%, overhead 4.18 ‰, an increase of 19 per year.
37%, finance costs -0.
50,000 yuan, compared with 0 in the same period last year.
800 million, a decrease of 106 every year.
88%, R & D expenses 6.
64 ppm, an increase of 31 per year.
22%, accounting for 8% of revenue.
49%, R & D investment has continued to increase, and the number of R & D personnel has increased by nearly 600, an increase of more than 25.
92%, gradually applied for more than 300 invention patents, including high-speed, high-swap-life printed board connectors, wireless optical transmission technology between boards, and other product technologies. Breaking foreign monopolies, forming independent intellectual property rights, anti-nuclear electromagnetic pulse connection technologyMany technical achievements, such as seawater direct cooling and cold plate technology, are on par with 上海夜网论坛 international counterparts, representing the highest level, and the technical advantages are becoming more and more obvious.
Subsidiary companies’ performance has improved markedly, and synergies have emerged.
The preliminary performance of the company’s subsidiaries has improved significantly, of which Shenyang Xinghua achieved revenue and profit of 9 respectively.
1 ppm and 0.
7.3 billion, an increase of 12 each year.
3% and 49.
8%; AVIC Fujita achieved revenue and profit of 3 respectively.
9.3 billion and 0.
2.6 billion, a decrease of 5 each year.
1% and 111% growth; Shenzhen Xiangtong Optoelectronics realized revenue and profit of 3 respectively.
200 million and 0.
3.4 billion, an increase of 11 each year.
3% and a decrease of 10%, the synergy effect of the parent and subsidiary companies gradually appeared.
Looking forward to the future, both the supply and demand of the company will continue to improve. Military-civilian integration is optimistic about the company’s development prospects.
Looking to the future, on the supply side, the company’s supply capacity is expected to improve significantly through the company’s new base operation and gradual running-in after the restructuring of the business unit. On the demand side, the military sector benefits from accelerated equipment installation and the improvement of information technology and other factors are expected to remainProsperous, at least the impact of “pressing two gold” by downstream customers must be eliminated. The civilian products business benefits from the rise of 5G. The rapid development of new energy vehicles and rail transit construction is also expected to continue to grow.
As a model of military-civilian integration, the company is optimistic about its future development prospects.
Earnings forecast, estimation and investment rating: We estimate the company’s net profit attributable to its parent to be 11 in 2019-2021.
6.4 billion, 13.
9.5 billion and 16.
76 million US dollars, comprehensively considering the valuation of the industry’s comparable companies and the company’s historical assessment level, we give the company 34 times PE in 2019, with a target price of 50 yuan, and give it a “recommended” rating for the first time.
Risk warning: The growth rate of military orders is higher than expected; the speed of 5G construction is lower than expected; the gross profit margin of new energy vehicles declines.