AECC AP(SH:600893) Minsheng Securities·2024-04-30 08:00Investment Rating - The report maintains a "Recommended" rating for the company [1] Core Views - The company achieved a significant year-on-year increase in net profit of 76% in Q1 2024, driven by increased fair value gains, reduced operating expenses, and lower taxes [1] - The company is positioned to benefit from the high demand in the aviation engine and gas turbine market during the "14th Five-Year Plan" period in China [1] - The company is expected to achieve revenue growth of 13.8% in 2024 compared to 2023, with projected net profits of 1.61 billion, 1.98 billion, and 2.56 billion for 2024 to 2026 respectively [1] Financial Performance Summary - In Q1 2024, the company reported revenue of 6.27 billion yuan, a 2.0% increase year-on-year, and a net profit of 155 million yuan, a 76.0% increase year-on-year [1] - The gross margin decreased by 0.3 percentage points to 11.6%, while the net margin increased by 1.2 percentage points to 3.0% [1] - The company’s subsidiary, Xihang, reported a revenue increase of 95.8% year-on-year in Q1 2024, with net profit growth of 712% [1] Cost Management and Inventory - The company has optimized its operating expenses, reducing the expense ratio by 1.6 percentage points to 9.4% in Q1 2024 [1] - Inventory increased by 22.4% to 36.31 billion yuan, driven by increased orders and production input [1] - Accounts payable rose by 30.6% to 23.48 billion yuan, reflecting increased production tasks and procurement of raw materials [1] Future Outlook - The company is expected to maintain stable growth, with projected revenues of 49.76 billion yuan in 2024 [1] - The company’s leading position in the aviation engine industry is expected to support its long-term growth prospects [1]