Aerospace Electric (002025)： Q3 development investment drives gross profit margin to stabilize and gradually rise, and performance is expected to accompany the industry’s rebound
Aerospace Electric (002025): Q3 development investment drives gross profit margin to stabilize and gradually rise, and performance is expected to accompany the industry’s rebound
Q3’s performance was stable, and R & D growth led to a steady recovery in gross profit margin: On October 21, the company released its 19Q3 quarterly report, with revenue of 25 in the first three quarters.12 ‰, +28 a year.11%, net profit attributable to mother 2.97 ppm, +11 for ten years.The gross profit margin was 34% from 34 in the first half.8% rebounded to 36.8%, R & D expenses 2.66 trillion, ten years +28.6%; single quarter revenue 8.9.3 billion, ten years +12.68%, net profit attributable to mother 1.09 million yuan, ten years +0.09%, single quarter R & D expenses1.45 ppm, + 32% per year, the company’s performance is expected to achieve a double rebound in gross profit margin and sales. Performance review by sub-segment: In the first half of the year, product sales 四川耍耍网 took the lead in bottoming out, and expected performance recovery is expected. Connectors are electrical connections between system or complete circuit units, components for signal transmission, and are the products with the highest proportion of aerospace appliances in revenue (58 in 2018).2%, 2019H1 accounted for 61.4%), 2019 H1 connector product revenue9.94 ‰, + 58% a year, the growth rate increased by 77.7 units.The products that account for the company’s revenue ranking 2-3 are: Motor product revenue 4.31 ppm, +14 a year.6%, relay product revenue 1.36 trillion, +36 a year.7%, an increase of 59.2 units. Leading military connector companies are expected to fully benefit from the arrival of the industry’s upward inflection point. Military connectors are the basic components necessary to form a complete weaponry system. They 苏州夜网论坛 are divided from commercial connectors. It is a special, sensitive connector with a strong and reliable structure.Extremely high performance, high cost, and resistance to harsh environments.According to China Industry Information Network and China Report Network, the previous military connector market will maintain high growth, and industry concentration will increase. The market size in 2018 was nearly $ 9 billion, and the market share of the top 6 companies reached 78% (2013-(Up to 19 goals in 2018), it is expected that the last two industries in the “Thirteenth Five-Year Plan” will accelerate growth, and by 2020, the industry scale is expected to reach $ 12.5 billion. As the backbone enterprise of the Soviet military connector, Aerospace Appliance is expected to fully benefit from the inflection point of the industry. Invested in the establishment of a new company in Guangdong, China, and laid out the field of civilian connectors. The company opened its growth track in March 2019.US $ 20.0 billion in own funds and a joint venture with Dongguan Yangming to establish Guangdong Huaying (51% holding), the business scope will cover civilian connectors, precision molds and precision parts research and development, production and sales, goods, technology import and export business.Shareholder Dongguan Yang Ming promised that within 36 months from April 19, Guangdong Huajing should gradually realize a deduction of non-net profit of not less than 37.5 million yuan (excluding design and development by aerospace appliances, entrusting Guangdong Huajing to produce production connectionsProfit from the product).According to the Prospective Industry Research Institute, the total annual scale of the connector industry in 2018 is about 2600 trillion, of which military products account for about 6%, and the space for civilian connectors is vast.We believe that the company’s strategy for the layout of civilian products is expected to further push the company into the medium and long-term growth track. Earnings forecast and rating: The welcoming point of the military connector industry. The company continued to deploy mid-to-high-end products in the early stage. The overall product structure focuses on core high-margin products to improve quality and efficiency, thereby reducing sales of old products.Revenue from 2019-2021 to 24.63% / 27.35% / 30.83% lowered to 26% / 25% / 24%, revenue was 35.7/44.6/55.300 million, net profit attributable to mother is 4.25/5.10/6.1.3 billion, EPS is 0.99/1.19/1.43 yuan, the closing price of 24 on October 24.92 yuan, corresponding to 25 for PE.31/21.13/17.58x, maintain “Buy” rating. Risk reminder: The military connector industry’s growth rate is lower than expected, and the company’s civilian product technology inheritance is slower than the industry.