Zhongzhi shares (600038): Interim report performance increased by 35 each year.

5% Harbin branch performed strongly

Zhongzhi shares (600038): Interim report performance increased by 35 each year.

5% Harbin branch performed strongly

Event: The company released its 2019 Interim Report and achieved 69 in the reporting period.

One million yuan, an annual increase of 28.

75%, achieving net profit attributable to mother 2.

4.1 billion, an annual increase of 35.


The core point of view benefited from the increase in the delivery of aviation products, and the company’s revenue and profits further improved during the reporting period.

19H1 company achieved revenue of 69.

00 ppm (+28.

75%), the single quarter of the second quarter achieved revenue of 45.

1.3 billion (+40.

23%), the growth rate Q1 further improved.

The main sources of the company’s revenue increase are: 1) the demand for aviation equipment replacement promotes the restructuring and upgrading of the company’s product structure, and the delivery of high-value products increases; 2) the contract debt at the beginning of the growth and increase, gradually realized during the reporting 南宁桑拿 period;Advance.
The growth rate of net profit attributable to mothers in 19H1 exceeded revenue, mainly due to the management expense ratio (from 7 in the same period last year.

03% fell to 5 in the reporting period.

73%) and the decline in sales expense ratio.

Revenue of the Harbin branch increased for ten years.

98%, the company’s research and development costs increased significantly.

The company includes 4 reportable segments. The revenue and profits are mainly derived from the Harbin branch and the Jingdezhen branch, of which the proportion of revenue exceeds 97%.

19H1 Harbin Branch achieved revenue of 18.

4.6 billion (+75.

98%), Jingdezhen branch realized 47 revenue.

7.2 billion (+10.


During the reporting period, the company incurred R & D expenses of 1,059 million, an annual increase of 96.

28%, indicating that the new plan has increased the completion of delivery tasks.

In addition, the gross profit margin of the company in 19H1 was 11.

28%, about 12 of 18H1.

A slight decrease of 64% may be related to changes in product structure. Through manufacturing technology, scale, and pricing reforms, the gross profit margin is expected to gradually rise.

Demand for military and civilian helicopters continues to expand, and the company is expected to fully benefit.

Military products: The Army Aviation Brigade expands the military helicopter gap extension line. The new “White Paper” states that the trend of the global arms race shows that the defense military expenditure will continue to grow moderately and steadily, and the proportion of equipment will continue to increase.

Civilian products: “Opinions on the management reform of low-altitude airspace” clearly proposes the full opening of low-altitude airspace in 2020, and the “12th Five-Year Plan for the Construction of National Aviation Emergency Rescue System” clearly establishes an aviation emergency rescue system covering over 80% of land and key coastal waters.

With the development of low-altitude opening and emergency rescue construction, the demand for civilian helicopters is constantly expanding.

Financial Forecast and Investment Recommendations Taking into account the decrease in expense ratio and the increase in profits, we raised the company’s 19-21 year earnings forecast to 1.

04, 1.

29, 1.

58 (was 1.01, 1.

27, 1.

56 yuan).

With reference to a comparable company’s 52 times P / E ratio in 19 years, the target price is 54.

08 yuan, maintaining the “overweight” level.

Risks indicate that the delivery of military products is less than expected;