AECC AP(600893) 中航证券·2024-11-18 13:41Investment Rating - The investment rating for the company is "Buy" with a target price of 60.00 CNY [1]. Core Insights - The company reported a stable operating scale, but the net profit attributable to shareholders faced short-term pressure, with inventory reaching a historical high, indicating strong downstream order demand [1][37]. - The company achieved operating revenue of 25.956 billion CNY in the first three quarters of 2024, a decrease of 1.33% year-on-year, and a net profit of 726 million CNY, down 29.56% [1]. - The decline in net profit is attributed to three main factors: a decrease in investment income, an increase in financial expenses, and higher sales expenses due to increased after-sales support tasks [1][37]. - The company is positioned as a leader in the aviation engine sector, focusing on both military and civilian aviation engine development opportunities, which are expected to drive long-term benefits [1][37]. Financial Summary - For Q3 2024, the company reported operating revenue of 7.409 billion CNY, down 13.18% quarter-on-quarter, and a net profit of 131 million CNY, down 57.01% [5]. - The gross profit margin was 12.04%, a slight decrease of 0.06 percentage points, while the net profit margin was 3.15%, down 1.09 percentage points [1]. - The company’s total assets amounted to 402.27 billion CNY, with inventory at a record high, reflecting increased orders and product input [1][5]. - The cash flow from operating activities showed a net outflow of 17.276 billion CNY, primarily due to reduced customer prepayments and increased procurement expenses [5]. Business Segmentation - The company's main business segments include aviation engines and derivative products, foreign trade outsourcing, and non-aviation products, with aviation engines accounting for nearly 94% of total revenue [7][9]. - The revenue from aviation engines and derivative products was 171.60 billion CNY, a year-on-year increase of 4.02%, driven by increased customer demand and product deliveries [7][9]. - The company’s subsidiaries showed varied performance, with the main subsidiary, Liming Company, achieving a revenue of 117.56 billion CNY, up 4.98%, while the Southern Company faced a revenue decline of 16.80% [21][23]. Future Outlook - The company is expected to benefit from the growing domestic aviation engine market, projected to reach a value of 350.2 billion USD by 2041, as it serves as a core supplier for domestic commercial aircraft [24][37]. - Revenue projections for 2024-2026 are estimated at 459.64 billion CNY, 533.53 billion CNY, and 629.25 billion CNY, with net profits of 10.70 billion CNY, 13.85 billion CNY, and 17.95 billion CNY respectively [37].