AVIC MECHANICAL & ELECTRICAL (002013): Performance meets expectations Expectations of aviation mechanical and electrical main and concurrent development + extension development
2018 results are in line with expectations. AVIC Mechanical and Electrical announced 2018 results: operating income of 116.
37 ppm, an increase of 4 per year.
08% (after consolidation scope adjustment); net profit attributable to parent company 8.
37 ppm, an increase of 16 in ten years.
49%, corresponding profit 0.
The company plans to pay 0 for every 10 shares.
Military products business has grown steadily.
Based on the latest consolidated caliber, the 2018 military aviation and defense revenue was 72.
800 million, a year-on-year increase of +8.
17%, civil aviation income3.
500 million, YoY-9.
66% (reduction in scientific research income), industrial manufacturing income 38.
600 million, YoY-0.
Operating profit in 20189.
46%, a year-on-year increase of +0.
66ppt, with management / financial expense ratio YoY + 0.
46ppt / -0.
56ppt, asset impairment loss decreased by 0.
330,000 yuan, investment income increased by 0.
4.4 billion (asset disposal of Qing’an Group).
From the perspective of major subsidiaries, Singapore Airlines / 杭州桑拿网 Qing’an Group / Shaanxi Electric / Zheng Fei Equipment respectively achieved net profit1.
One in 7.6 billion.
2.9 billion / 1.
0.5 billion, a year-on-year increase of +20% / + 12% / + 12% / + 2%.
Operating cash flow turned into a net decrease.
Cash flow from operating activities in 2018 was a net reduction of US $ 900 million, of which operating receivables increased by 1.9 billion and operating response items decreased by 600 million.
The development trend is optimistic about the long-term steady growth of the aviation mechanical and electrical industry.
The company is a professional integration and industrialization development platform for aviation mechanical and electrical systems affiliated to the aviation industry, and is a leader in the domestic aviation mechanical and electrical field.
In 2019, the company will continue to enhance 武汉夜生活网 the core capabilities of the military aviation business, further promote professional integration, vigorously enhance the development of the maintenance market, and achieve development in the critical period of military aviation equipment upgrades.
In addition, the company will continue to enhance the development capability of the civil aviation industry and build a leading domestic and international first-class supplier of aviation mechanical and electrical systems.
We are optimistic about the company’s stable growth in the medium and long term. Is CAGR expected to be 15%?
Pay attention to the progress of asset integration.
With the advancement of the reform of the first batch of 41 military scientific research institutes, the integration of high-quality assets such as aerospace life-saving equipment, Jincheng Hydraulic Center is worth looking forward to.
Earnings forecast downgrades non-aeronautical civil product revenue forecast and 19/20 net profit forecast2.
6% / 3.
5% to 9.
9.4 billion / 11.
Estimates and recommendations Currently, the company expects to correspond to 26.
3x / 21.
9x 19 / 20e P / E.
We maintain the recommended rating and RMB10.
The target price of 20 yuan is 40 compared with the previous one.
Corresponds to 37x / 31x 19 / 20e P / E.
Risks in the pace of military order delivery, and the process of restructuring scientific research institutes are uncertain.