AVIC XAC(SZ:000768) Xin Lang Cai Jing·2025-05-05 12:34Core Viewpoint - The company reported a slight decline in revenue for Q1 2025, but an increase in net profit, driven by improved gross margin and other income growth [1][2]. Financial Performance - In Q1 2025, the company achieved revenue of 8.438 billion, a year-on-year decrease of 0.2% and a quarter-on-quarter decrease of 41.38% [1]. - The net profit attributable to shareholders was 289 million, representing a year-on-year increase of 5.97% and a quarter-on-quarter increase of 262.38% [1]. - The non-recurring net profit was 298 million, with a year-on-year increase of 7.45% and a quarter-on-quarter increase of 744.43% [1]. Profitability and Cost Management - The gross margin for Q1 2025 was 8.24%, up by 0.19 percentage points year-on-year [2]. - The overall expense ratio increased by 0.15 percentage points, with sales, management, R&D, and financial expense ratios showing mixed changes [2]. - Other income increased by 17 million, a year-on-year growth of 376.65%, due to tax incentives for advanced manufacturing enterprises [2]. Asset Management and Cash Flow - The return on equity (ROE) for Q1 2025 was 1.36%, maintaining a strong level compared to the past three years [3]. - Inventory balance was 22.086 billion, down 2.67% from the beginning of the year, indicating improved inventory management [3]. - Accounts receivable increased by 30.37% quarter-on-quarter, primarily due to outstanding payments for sales [3]. - Contract liabilities decreased by 1.10% quarter-on-quarter, suggesting a slowdown in the consumption of contract liabilities [3]. - Operating cash flow was -3.593 billion, showing significant improvement compared to Q1 2024 [3]. Strategic Positioning - The company is the sole main manufacturer of a full range of large aircraft in China, focusing on military and civilian aircraft [4]. - The military transport aircraft segment is seen as a force multiplier, with recent participation in international exercises enhancing military trade prospects [4]. - The company is positioned to capture significant value in the domestic large aircraft market, particularly with the C919 [4]. Profit Forecast and Valuation - Projected net profits for 2025-2027 are 1.152 billion, 1.398 billion, and 1.694 billion, with year-on-year growth rates of 12.52%, 21.42%, and 21.14% respectively [4]. - Corresponding price-to-earnings ratios for April 30, 2025, are estimated at 56.08, 46.19, and 38.13 times [4].