AVICHM(SH:600765) Soochow Securities·2024-03-16 16:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has demonstrated stable operations with a slight revenue increase of 0.07% year-on-year in 2023, achieving total revenue of 10.577 billion yuan and a net profit attributable to shareholders of 1.329 billion yuan, reflecting a year-on-year growth of 10.70% [2][3] - The implementation of a second phase of the equity incentive plan and acquisitions of stakes in related companies are expected to enhance the company's competitive edge in the forging and additive manufacturing sectors [3] - The domestic downstream demand remains stable, while the international market is showing gradual growth, with a 38% increase in international orders and over 80% growth in sales revenue [3] Financial Performance and Forecast - The company’s revenue and profit forecasts for 2024-2026 are as follows: - Net profit attributable to shareholders is projected to be 1.539 billion yuan in 2024, 1.889 billion yuan in 2025, and 2.172 billion yuan in 2026, with corresponding P/E ratios of 16, 13, and 11 times respectively [3] - The gross profit margin for the forging business reached 29.76%, an increase of 1.57 percentage points, while the hydraulic ring control business gross profit margin reached 35.70%, an increase of 3.18 percentage points [2][3] Market Position and Strategy - The company is part of the Aviation Industry Corporation of China and focuses on high-end aviation forging and hydraulic control, covering nearly all domestic aircraft and engine models, thus holding a dominant market position [3] - The company has signed management agreements and acquisition deals to enhance its overall forging technology and product quality, including acquiring 80% of Shandong Hongshan Aviation Forging Co., which will significantly expand its large forging capacity [3]