AECC AEC(000738) 民生证券·2024-08-28 04:31Investment Rating - The report maintains a "Recommend" rating for the company, citing its leading position in the aero-engine control systems sector and the expected efficiency improvements from state-owned enterprise reforms [2][3] Core Views - The company reported stable growth in 1H24, with revenue of RMB 2.81 billion, a YoY increase of 2.6%, and net profit attributable to shareholders of RMB 470 million, a YoY increase of 4.5% [2] - The company's performance was driven by increased deliveries of batch-produced products for aero-engine and gas turbine control systems, as well as international cooperation orders [2] - The company's gross margin increased by 0.4ppt YoY to 31.1% in 1H24, while the net margin increased by 0.3ppt to 16.8%, indicating stable profitability [2] - The company's R&D investment increased by 5.1% YoY to RMB 310 million in 1H24, with a focus on state-funded projects [2] - The company's operating cash flow improved significantly, with net cash flow from operating activities reaching RMB 190 million in 1H24, compared to -RMB 20 million in the same period last year [2] Business Performance - The company's core business, "two-engine" control systems, generated revenue of RMB 2.51 billion in 1H24, a YoY increase of 3.2%, accounting for 89.6% of total revenue [2] - International cooperation revenue grew by 12.2% YoY to RMB 180 million in 1H24, with a gross margin increase of 1.3ppt to 22.9% [2] - Revenue from derivative products of control system technology decreased by 20.2% YoY to RMB 110 million in 1H24, with a gross margin increase of 4.5ppt to 37.4% [2] Financial Projections - The report forecasts net profit attributable to shareholders of RMB 840 million, RMB 1.03 billion, and RMB 1.23 billion for 2024, 2025, and 2026, respectively, with corresponding P/E ratios of 29x, 24x, and 20x [2][3] - Revenue is expected to grow at a CAGR of 12.4% from 2024 to 2026, reaching RMB 7.86 billion by 2026 [6] - The company's gross margin is projected to increase from 27.46% in 2023 to 28.71% by 2026, while the net margin is expected to rise from 13.65% to 15.68% over the same period [6] Operational Efficiency - The company's labor productivity increased by 8.5% YoY to RMB 224,800 per employee in 1H24 [2] - The company's accounts receivable increased by 13.4% compared to the beginning of the year, reaching RMB 4.58 billion, mainly due to customer payment delays in the first half of the year [2] - The company's contract liabilities decreased by 5.7% compared to the beginning of the year, standing at RMB 370 million [2]