AECC AP(SH:600893)2024-04-07 16:00Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook based on strong demand in the aviation sector and the company's core position in the domestic aerospace engine market [8][14]. Core Views - The company achieved a revenue of 43.734 billion yuan in 2023, representing a year-on-year growth of 17.89%, with a net profit of 1.421 billion yuan, up 12.17% from the previous year [8]. - The aviation market remains robust, with expectations for continued revenue growth driven by increasing military aircraft procurement and the company's core role in domestic aerospace engine production [8][10]. - The company's gross margin improved to 11.08% in 2023, attributed to mature product processes and enhanced economies of scale, despite a slight decrease in net margin due to rising financial costs [8][10]. - High levels of inventory and contract liabilities, amounting to 30.667 billion yuan and 11.876 billion yuan respectively, indicate strong downstream demand and industry prosperity, supporting stable revenue growth [8][10]. - The company is expected to benefit from strong downstream demand for military aircraft and accelerated domestic substitution, with revenue projected to continue growing rapidly over the next three years [8][10]. Financial Summary - The company reported total revenue of 43.734 billion yuan in 2023, with projections of 52.578 billion yuan in 2024 and 63.310 billion yuan in 2025, reflecting a compound annual growth rate [10]. - The net profit for 2023 was 1.421 billion yuan, with forecasts of 1.634 billion yuan in 2024 and 1.912 billion yuan in 2025, indicating a steady increase in profitability [10]. - Earnings per share are expected to rise from 0.53 yuan in 2023 to 0.61 yuan in 2024 and 0.72 yuan in 2025, showcasing the company's growth potential [10].