AVIC Aircraft (000768): 1Q19 revenue increased 21 year-on-year.

42% optimistic about the company’s operating efficiency improvement

AVIC Aircraft (000768): 1Q19 revenue increased 21 year-on-year.

42% optimistic about the company’s operating efficiency improvement

The 1Q19 results are in line with expectations. AVIC Aircraft Corporation announced the first quarter of 2019 results: total operating income 63.

7.5 billion, 21 a year ago.

42%; net profit attributable to mother is 39.47 million yuan, 46. one year ago
.

13%, the basic EPS is 0.

0143 yuan, in line with expectations.

Balanced production led to rapid growth in single quarter revenue; the impact of period profit and loss on net profit transmission.

In the first quarter of 19, the company’s revenue increased by 21 year-on-year.

42%, we judge it is mainly due to the further promotion of balanced production construction; gross profit is 3.

290,000 yuan, a year-on-year increase of +3.

The operating profit was 58.89 million yuan, a significant increase from the 3.29 million yuan in the same period of the previous year. The period expenses decreased, the gains and losses from changes in fair value and the increase 成都桑拿网 in gains from asset disposal increased.

At the end of the reporting period and the beginning of the period, the company’s bills receivables and accounts receivables, inventory, bills payables and accounts payable increased by 3.7 billion, 1.1 billion and 2.5 billion, respectively.

The development trend is optimistic about the further advancement of the company’s lean reform and balanced production construction.

In 2018, both Xifei and Shaanxi achieved the “1225” balanced production target.

In 2019, we expect the company to further develop towards the target production rhythm of “1234” and even “2233” to ensure that scientific research and production tasks are completed with high-quality and scheduled delivery.

At the same time, in 2018, the company issued a roadmap of lean factory construction covering all elements of management, a panorama of lean unit construction, and a unitized production model was replaced in the system.

In 2019, we expect that the company will continue to vigorously advance the lean reform of the unit, advance inventory and cost management and control, optimize resource allocation efficiency, and promote healthy corporate development.

Optimistic about the long-term development prospects of large and medium-sized domestic aircraft.

As far as military products are concerned, the West-20’s Yun-20, Shaanxi’s Yun-8, Yun-9 and special mission aircraft are full of orders, and the installation gap during the transition to the strategic air force is still large.

As far as civilian products are concerned, the company plays an important role in the “two-dozen, two-branch” system, benefiting from the development of C919, ARJ21, MA700 and so on.

Earnings forecast We maintain our 2019 / 20e net profit forecast6.

$ 5.6 billion / 7.

78 trillion is unchanged.

Estimates and recommendations currently correspond to sustainable companies.

0x / 27.

3x 19 / 20e EV / EBITDA.

We are optimistic about the improvement of the company’s operating efficiency by balanced production and raise the target price9.

4% to 17.

5 yuan, corresponding to 35x / 30x 19 / 20e EV / EBITDA, compared to the current sustainable 8.

3% upside, temporarily maintain the neutral rating unchanged.

There is uncertainty about the pace of risk military order delivery.