AVICHM(600765) 国金证券·2024-11-18 04:27Investment Rating - The report maintains a "Buy" rating for AVIC Heavy Machinery (600765.SH) [1] Core Views - AVIC Heavy Machinery is a leading player in China's aviation forging industry, focusing on its core business and promoting integrated supply chain development, transforming from a forging leader to a key player in aviation structural components [2][3] - The company has shown steady growth from 2019 to 2023, with revenue increasing from 5.985 billion to 10.577 billion RMB, representing a CAGR of 15.3%, and net profit rising from 275 million to 1.329 billion RMB, with a CAGR of 48.3% [1][2] Summary by Sections Company Overview - AVIC Heavy Machinery is recognized as the "first stock of AVIC Industry" and has been focusing on streamlining operations while advancing its integrated supply chain layout [1] - The company has established a new ecosystem for material research and regeneration, forging, precision machining, and overall functional components [2] Investment Logic - The company is strategically acquiring stakes in upstream and midstream businesses to enhance its supply chain, including a 7.81% stake in Anji Precision Casting, which specializes in complex precision castings for defense and aerospace [2] - The report draws parallels with the international giant PCC, which grew from a casting factory to a major player in the aerospace parts industry through strategic acquisitions and vertical integration [2] Financial Forecast and Valuation - The forecast for 2024, 2025, and 2026 projects revenues of 12.233 billion, 14.337 billion, and 16.882 billion RMB, respectively, with year-on-year growth rates of 15.66%, 17.20%, and 17.75% [3] - Net profit is expected to reach 1.568 billion, 1.885 billion, and 2.268 billion RMB for the same years, with corresponding EPS of 1.06, 1.27, and 1.53 RMB [3] - The target price is set at 31.81 RMB, based on a 25x PE ratio for 2025, reflecting the company's comprehensive business layout and future growth potential [3]