Baimtec Material (SH:688563) AVIC Securities·2024-04-22 02:02Investment Rating - The investment rating for the company is "Buy" with a target price of 69.30 CNY [1] Core Views - The company has achieved robust revenue growth and improved profitability, with 2023 revenue reaching 2.803 billion CNY, a 20.01% increase, and net profit of 576 million CNY, a 30.23% increase [1] - The company is the only publicly listed supplier of aerospace new materials under AVIC Group, providing a strong competitive advantage in both military and civilian markets [9] - The company is actively addressing capacity bottlenecks and expanding production capabilities to meet increasing demand [9] Summary by Sections Financial Performance - In 2023, the company reported revenue of 2.803 billion CNY, a 20.01% increase, and a net profit of 576 million CNY, a 30.23% increase [1] - Gross margin was 31.55%, down 2.24 percentage points, while net margin improved to 20.56%, up 1.61 percentage points [1] - The company’s operating cash flow increased to 265 million CNY from 172 million CNY year-on-year, indicating improved operational efficiency [1] Business Segments - Revenue from basic materials was 1.323 billion CNY, accounting for 47.20% of total revenue, while revenue from aerospace finished products was 1.238 billion CNY, accounting for 44.18% [1] - The company has a strong presence in both domestic and international markets, with over 90% of revenue generated from domestic operations [1] Market Position and Opportunities - The company is well-positioned to benefit from the growth of the domestic aviation market, particularly with the C919 aircraft program [9] - The company has signed contracts worth 1.79 billion CNY expected to be recognized in 2024 and beyond, indicating strong future revenue visibility [2] Capacity Expansion - The company is undertaking five fundraising projects to enhance production capacity and is working on the equity injection of its titanium alloy precision casting subsidiary [3] - The company is also addressing production bottlenecks to capture market share effectively [9] Employee Engagement - As of the end of 2023, 29.58% of employees participated in the employee stock ownership plan, which aligns the interests of employees and the company for sustainable development [8]