Aerospace Electric (002025): Faster growth in revenue in 1Q19 Concerned about the industrialization of new products and progress in intelligent manufacturing

Aerospace Electric (002025): Faster growth in revenue in 1Q19 Concerned about the industrialization of new products and progress in intelligent manufacturing
The first quarter of 2019 results are basically in line with expectations of the company’s first quarter of 2019 results: operating income6.720,000 yuan, an increase of 39 in ten years.45%; Net profit attributable to parent company is 0.78 ppm, an increase of 20 in ten years.01%, corresponding to EPS 0.18 yuan, basically in line with expectations; net profit after deduction is 0.77 ppm, an increase of 28 in ten years.57%. Faster revenue growth and slight increase in gross profit margin; expenses improved during the period.Revenue in the first quarter of 19 increased by 39 year-on-year.We believe that the rapid growth in revenue is mainly due to the gradual delivery of previous orders; the gross profit margin YoY-6ppt to 44%, mainly due to changes in product structure (increasing the proportion of civilian products).The expense ratio improved during the period, and the sales / management / R & D expense ratio YoY + 0.15ppt / -3.25ppt / -2.74ppt. Inventory and advance receipts remained high, and orders and scheduling tasks were full.As of the end of 1Q19, the inventory was 4.99 ppm, an increase of 35% over the beginning of the year, mainly due to the increase in the purchase of production materials; advance receipts were 0.2 ppm, an increase of 22% over the beginning of the year, and customer demand maintained a high business climate; monetary funds fell by 35% over the beginning of the year, mainly due to the increase in orders and the company increased cash payments for material procurement, outsourced materials, and outsourcing processing. Development Trends Leading companies in the military connector industry continue to develop the field of civilian products, focusing on the industrialization of new products and the progress of smart manufacturing projects.The company’s military product revenue accounts for about 70% of its revenue, covering aerospace, aviation, electronics, ships, weapons and other fields. It is a leading military connector leader; in terms of civilian products, it is actively deploying new-generation information technology, 5G communications, intelligent equipment, new energyHigh-tech fields.The company has always maintained high investment in research and development. At present, it has succeeded in new products such as photoelectric “single-multimode converters”, LRM “straddle-type” high-speed photoelectric mixed connectors, wool button mixed modules and other new products.Further growth in performance.In addition, the company is advancing smart manufacturing projects to optimize the production process, and we expect to find ways to further improve production efficiency in the future. The profit forecast remains unchanged from the 19/20 net profit forecast. Estimates and recommendations The company currently can sustainably cope with 24/19/20.6x / 20.5 times price-earnings ratio.Keep the recommendation and target price unchanged, corresponding to the 19x / 20x 36x / 30x 成都桑拿网 price-earnings ratio, with a potential growth of 45%. Risk Uncertainty in delivery of military products orders; development of civilian products is worse than expected;