Hangfa Power (600893) Quarterly Review: Benefit from the Continuous Improvement of the Quality of Balanced Production and Operation Downstream

Hangfa Power (600893) Quarterly Review: Benefit from the Continuous Improvement of the Quality of Balanced Production and Operation Downstream
Leading domestic aero-engine companies continue to improve their operating quality. Maintaining a “Buy” rating. Afghan Power is the only domestic company that manufactures all types of military aero-engines, and plays an important role in the development of national military aviation equipment and large aircraft industries.The company achieved operating income of 33 in the first quarter of 2019.40 ppm, an increase of 20 in ten years.36%, net profit attributable to mothers was 3.91 million yuan, a year-on-year increase of 106.77%, the first quarterly profit since 2015.We expect the company’s EPS for 2019-2021 to be 0.50, 0.58 and 0.67 yuan, meanwhile, there is room for performance improvement in factors such as the subsequent expectation of military reform, and maintain a “buy” rating. Benefiting from balanced downstream production, continuous improvement in operating quality and the maturity of existing military weaponry and equipment technologies, and the transformation of the defense equipment procurement and delivery model, the company’s downstream aviation manufacturing company’s product sales revenue recognition model gradually shifted from centralized final confirmation to balanced production in four quarters.Equilibrium confirmation shift.The company’s operating income in the first quarter of 2019 increased by half a year and increased by 20.36%, the highest quarterly report since 2015; the net profit returned to the mother in the first quarter of 2019 turned losses into positive, also the first quarterly profit since 2015.At the same time, the company’s first 天津夜网 quarter of 2019 net cash flow from operations.8.6 billion, a net decrease in operating cash flow in the first quarter of 201816.6.2 billion outstanding improvements.In addition, the company’s inventory was 170 at the end of the first quarter of 2019.140,000 yuan, an increase of 27 from the end of 2018.72 megabytes, indicating a strong downstream demand. National defense equipment installation and military-civilian integration development are the driving forces for performance. It is expected to benefit from military pricing reform. The company is the only domestic domestic supplier of three-generation main-model military turbofan engines, and it is in a leading position in the domestic aviation engine industry.We believe that in the last two years of the 13th Five-Year Plan, national defense construction will begin to accelerate. 武汉夜网论坛 Accelerating the installation of downstream supporting national defense equipment and continuous advancement of domestic substitution of aero engines will constitute the company’s main business support.At the same time, through the development of the domestic large aircraft industry and the continuous advancement of the two aircraft special projects, domestic commercial aviation engines have begun to accelerate their catch-up with international advanced levels. As the leader of the asset industry of major domestic aviation engine operating companies, the company has a bright future for the core supporting business of domestic commercial aviation development.In addition, the company, as an aero engine main unit, is expected to benefit from military pricing reforms and significantly improve asset profitability. The leader of domestic aviation development, which directly benefits from the installation of equipment and the integration of military and civilians, maintains a “buy” rating. We expect the company’s operating income for 2019-2021 to be 244.2.3 billion, 261.04 ppm and 280.08 million yuan, the net profit attributable to the mother was 11.3.6 billion, 13.06 ppm and 15.100,000 yuan, the corresponding EPS is 0.50, 0.58 and 0.67 yuan.We are optimistic about the company’s outstanding industrial level and influence on industrial development, and there is ample room for growth in the future. We maintain a “Buy” rating. Risk reminder: National military expenditures fall short of expectations, new products are not delivered as expected, and the progress of military pricing reform is not up to expectations