AECC AEC(SZ:000738)2024-08-29 06:30Investment Rating - The report maintains a "Recommended" rating for the company [4]. Core Views - The company achieved a revenue of 2.806 billion yuan in H1 2024, representing a year-on-year increase of 2.61%, and a net profit of 470 million yuan, up 4.5% year-on-year, indicating that the performance is in line with expectations and the annual target of 5.6 billion yuan is achievable [2][3]. - Cost reduction and efficiency improvement have yielded results, with a gross margin of 29.25% in Q2 2024, up 0.81 percentage points year-on-year, and a net profit margin of 15.15%, up 0.20 percentage points year-on-year, primarily due to effective cost control [2]. - Each subsidiary is performing well, with capacity construction progressing smoothly, and the company is expected to maintain a low R&D expense ratio in 2024 due to the existing production peak of current models [2][3]. Financial Performance Summary - H1 2024 revenue by subsidiaries includes: - Xi'an Aero Engine Control: 1.208 billion yuan (YoY +1.6%), net profit 187 million yuan (YoY +10.1%) - Honglin Aero Engine: 921 million yuan (YoY +0.7%), net profit 193 million yuan (YoY +0.3%) - Beijing Aero Science: 440 million yuan (YoY +5.5%), net profit 64 million yuan (YoY -1.5%) - Changchun Aero Engine: 187 million yuan (YoY +0.8%), net profit 12 million yuan (YoY +6.4%) [3]. - The company is focusing on expanding its civil engine market and is actively involved in the research and development of new generation aviation power systems, which is expected to create new growth points [3]. Financial Forecast - The projected financial indicators for the company are as follows: - Revenue (billion yuan): 5.324 in 2023, 5.665 in 2024, 6.749 in 2025, and 7.752 in 2026 - Net profit (billion yuan): 0.727 in 2023, 0.769 in 2024, 0.897 in 2025, and 0.987 in 2026 - EPS (yuan): 0.55 in 2023, 0.58 in 2024, 0.68 in 2025, and 0.75 in 2026 - PE ratios: 33.69 in 2023, 31.85 in 2024, 27.28 in 2025, and 24.79 in 2026 [8].