AVIC (600372): Increase in orders and balanced production to promote revenue growth Growth of convertible bond costs led to a significant increase in financial costs

AVIC (600372): Increase in orders and balanced production to promote revenue growth Growth of convertible bond costs led to a significant increase in financial costs

Investment Highlights The company released the first quarter report of 2019: the company achieved operating income12.

6.3 billion, an annual increase of 39.

91%; net profit attributable to mothers-37.45 million yuan, a reduction of 22.11 成都桑拿网 million yuan a year; net profit attributable to mothers after deduction of -55.57 million yuan, a reduction of 55.65 million yuan in losses; average average return on net assets-0.

49%, an increase of 0 every year.

34 units.

The company’s operating income achieved rapid growth. First of all, some subsidiaries increased orders in the first quarter and the subsidiaries strengthened balanced production and balanced delivery.

In the past, the operating income of military industrial enterprises was concentrated in the fourth quarter, and the scale of revenue in the first three quarters.

Since the Aviation Industry Group proposed balanced production, the quarterly revenue gap between OEMs and supporting companies has narrowed, and balanced production has driven the company’s revenue growth in the first quarter of 2019.

The company’s operating income increased and the product’s gross profit margin increased, thereby significantly reducing its profits and losses.

The company’s comprehensive gross profit margin is 29.

27%, an increase of 2 per year.

09 averages.

Company period expenses 3.

94 ppm, an increase of 10 per year.

10%, accounting for 31 of operating income.

19%, a decline of 8 per year.

45 units.

Financial expenses are 76.3 million yuan, an annual increase of 85.

08%, of which interest expenses increased significantly by 79.43 million yuan, due to the company’s financial costs incurred by the issue of 24 trillion convertible bonds in 2017; management costs2.

03 billion, down 10 a year.

15%; R & D costs 88.15 million yuan, an increase of 34 throughout the year.

10%.

The reported company incurred a credit impairment loss of 7 million yuan, which had a certain degree of impact on net profit reduction.

The company’s non-recurring gains and losses were 1831 million, down 67 for many years.

69%.

The government subsidies 11.09 million yuan, a decrease of 10.61 million yuan each year; the trusteeship income from entrusted operations is 10.6 million yuan, a decrease of 13.9 million yuan.

While the company’s operating income and profit maintained a high growth rate, the company improved its asset turnover rate by optimizing the supply chain.

The company’s inventory was 40 in the first quarter of 2019.

96 ppm, a ten-year increase of 7.

60%; inventory turnover rate is 0.

23. Promote 27 every year.

78%.

Notes and accounts receivable 86.

49 ppm, an increase of 14 years.

77%; of which accounts receivable 70.

6.1 billion, an annual increase of 15.

99%, accounts receivable turnover ratio is 0.

19. The same period last year was 0.15, promote 26 every year.

67%.

The growth of accounts receivable is mainly due to the increase in orders of some subsidiaries in the first quarter.

We maintain our profit forecast and expect the company’s net profit attributable to its parent to be 5-20 in 2019-2021.

22/5.

88/6.

73 trillion, EPS is 0.

30/0.

33/0.

38 yuan, corresponding to the closing price of PE on April 26 is 54/48/42 times, maintaining the “prudent increase” rating.

Risk reminder: the progress of revenue recognition exceeds expectations; intensified competition in the military and civilian products markets, and gross margin shift; new business development progress is less than expected