AVIC SAC(SH:600760) Minsheng Securities·2024-10-31 02:05Investment Rating - The report maintains a "Recommended" rating for the company, indicating a positive outlook for its long-term development [5]. Core Views - The company experienced a revenue decline of 27.0% year-on-year in the first three quarters of 2024, with total revenue reaching 25.3 billion yuan and a net profit of 1.82 billion yuan, down 23.1% year-on-year. This performance aligns with market expectations, primarily due to delays in contract signings affecting short-term results [2]. - Despite the short-term fluctuations in performance, the company shows strong demand in downstream equipment and is actively expanding into overseas markets, which supports a positive long-term outlook [2]. - The company has significantly increased its R&D investment, with R&D expenses rising to 600 million yuan, a 9.4% increase year-on-year. The R&D expense ratio reached 2.4%, reflecting a commitment to technological advancements in key areas, particularly in the aerospace sector [3]. - The company's cash flow from operating activities improved, with a net cash flow of -5.89 billion yuan for the third quarter of 2024, an improvement from -12.43 billion yuan in the same period last year [4]. Financial Performance and Forecast - For the first three quarters of 2024, the company reported a gross margin of 12.5%, an increase of 1.63 percentage points year-on-year, while the net margin was 7.1%, up 0.39 percentage points year-on-year [2]. - The company forecasts net profits of 3.775 billion yuan, 4.665 billion yuan, and 5.683 billion yuan for 2024, 2025, and 2026, respectively, with corresponding price-to-earnings ratios of 34x, 28x, and 23x [5]. - The company’s total revenue is projected to grow from 46.25 billion yuan in 2023 to 72.94 billion yuan by 2026, with a compound annual growth rate of approximately 19.1% [8][10]. Cash Flow and Balance Sheet - As of the end of the third quarter of 2024, accounts receivable increased by 64.9% year-to-date to 15.54 billion yuan, while inventory decreased by 1.4% to 11.49 billion yuan [4]. - The company’s total assets are expected to grow from 55.47 billion yuan in 2023 to 93.71 billion yuan by 2026, indicating a robust growth trajectory [10].