AECC AEC(SZ:000738) AVIC Securities·2024-11-08 01:02Investment Rating - The investment rating for the company is "Buy" with a target price of 28 CNY, indicating an expected return of over 10% relative to the CSI 300 index in the next six months [2][11]. Core Views - The company has shown steady revenue growth and improved profitability, with Q1-Q3 2024 revenue at 4.21 billion CNY (+2.67%) and net profit at 629 million CNY (+5.48%) [2][4]. - The company is a leading player in the aviation control systems sector, benefiting from strong domestic and international orders, particularly in the context of the recovery of the international aviation market [7][11]. - The company is actively advancing its capacity expansion projects, which are expected to enhance its production capabilities by 2026 [8][11]. Summary by Sections Financial Performance - For Q1-Q3 2024, the company reported revenue of 4.21 billion CNY, a slight increase of 2.67%, and a net profit of 629 million CNY, up 5.48% [2][4]. - The gross margin improved to 29.71% (+0.42 percentage points) and net margin to 15.02% (+0.40 percentage points) [2][4]. - In Q3 2024, revenue was 1.40 billion CNY (+2.79% YoY), with net profit at 159 million CNY (+8.61% YoY) [2][4]. Business Segments - The company's revenue from aviation engine and gas turbine control systems was 2.52 billion CNY (+3.23%) with a gross margin of 31.42% [4][11]. - International cooperation revenue reached 183 million CNY (+12.21%) with a gross margin of 22.85% [4][11]. - Revenue from control system technology derivative products was 108 million CNY (-20.17%) with a gross margin of 37.42% [4][11]. Future Outlook - The company anticipates continued growth in 2024 driven by increased production of control systems and international cooperation orders [11][12]. - Revenue projections for 2024-2026 are 5.70 billion CNY, 6.31 billion CNY, and 7.18 billion CNY respectively, with net profits expected to be 770 million CNY, 837 million CNY, and 899 million CNY [11][12]. - The company is well-positioned to capitalize on national strategies for large aircraft development and the recovery of the aviation market [7][11].