AECC AP(SH:600893) Minsheng Securities·2024-09-02 06:00Investment Rating - The report maintains a "Recommended" rating for the company [1] Core Views - The company reported a revenue of 18.55 billion yuan in 1H24, a year-on-year increase of 4.3%, while the net profit attributable to shareholders decreased by 18.0% to 590 million yuan due to a reduction in investment income [1] - The main business of the company is steadily developing, with significant revenue growth from its subsidiary, Xihang Company, which saw a 17.1% increase in revenue [1] - The company is expected to benefit from the high demand in China's aviation engine market, with projected net profits of 1.51 billion, 1.91 billion, and 2.38 billion yuan for 2024 to 2026 [1] Financial Performance Summary - For 2023A, the total revenue is 43.734 billion yuan, with an expected growth rate of 17.9% [5] - The net profit attributable to shareholders for 2023A is 1.421 billion yuan, with a growth rate of 12.2% [5] - The company’s gross margin for 1H24 decreased to 11.3%, while the net margin fell to 3.6% [1] - Investment income for 1H24 decreased by 240 million yuan compared to the previous year, impacting overall profit [1] Business Segment Performance - The revenue from aviation products and derivatives reached 171.6 billion yuan in 1H24, with a year-on-year growth of 4.0% [1] - The foreign trade subcontracting business generated 1 billion yuan in revenue, up 11.0% year-on-year [1] - Non-aviation product revenue was 360 million yuan, reflecting a 1.1% increase [1] Cost and Expense Analysis - The company’s expense ratio for 1H24 decreased by 0.2 percentage points to 7.1% [1] - Sales expenses increased by 15.6% to 290 million yuan due to increased after-sales support tasks [1] - Financial expenses surged by 190% to 150 million yuan, primarily due to increased financing and reduced exchange gains [1] Investment Outlook - The company is positioned as a leading enterprise in the aviation engine industry in China, expected to benefit from the long-term growth of the sector [1] - The projected PE ratios for 2024 to 2026 are 63x, 50x, and 40x respectively, indicating a favorable valuation outlook [1]