Aerospace Electronics (600879): Focus on the growth of the space military products business and the prospects for the reform of the Nine Academy of Aerospace

Aerospace Electronics (600879): Focus on the growth of the space military products business and the prospects for the reform of the Nine Academy of Aerospace
The company’s recent development of aerospace 武汉夜生活网 electronics is an important supporting supplier in various fields of aerospace industry and a pioneer in the reform of state-owned enterprises in the aerospace department.We update the company. Comment on aerospace support: The traditional dominant main business is expected to maintain steady growth.The company is an important supporting unit for “Darts and Starships” such as Beidou-3, Chang’e-4 and other categories, covering the fields of measurement and control communications, electromechanical components, integrated circuits, inertial navigation and other fields. The aerospace military revenue accounts for about 60% of the company’s total revenue.%.At present, domestic aerospace is developing rapidly to aerospace power. We expect the company’s aerospace supporting business to maintain steady growth. Wires and cables: actively break through structural upgrades and are optimistic about the added value of products.The main business of the wire and cable business is a wholly-owned subsidiary Aerospace Electric, with revenue accounting for about 35% of the company’s total revenue.Aerospace Electric is a key wire and cable company, and has been selected as one of the top 20 companies in China’s cable industry for three consecutive years.In the end, we will continue to promote product structure upgrades, increase research and development efforts on high-end cables, special cables and other high-end products; we expect that through the increase in the proportion of high-end products in the future, the profitability of wire and cable is expected to increase. System-level products: We expect drones and bombs to continue to grow.For UAVs, the “Fei Teng” series of precision guidance products are system-level products assembled by the company.At present, the company has completed the establishment of aerospace Feihong, creating a platform for the UAV industry; the “Feiteng” series of precision guided bombs have the obvious advantages of miniaturization, advanced, compound mode, standardization, intelligence, substitution, and serialization, and have achieved a certain internationalReputation. Pay close attention to the progress of the reform of the 9th Academy of Aerospace.The company ‘s controlling shareholder, the Aerospace Academy, is the only aerospace electronics technology academy of the Aerospace Science and Technology Group, and its subordinate assets except for the time vision and military scientific research institutes are injected into listed companies.At present, the restructuring of military research institutes is gradually getting better, and we are concerned about the progress of the reform of the Ninth Academy of Aerospace. It is estimated that the growth rate of aerospace and military ancillary business is slightly revised, and the net profit forecast for 19/20 is lowered10.4% / 13.2% to 5.00 ‰ / 5.8.1 billion. The company’s current consensus corresponds to 19/20 33.8x / 29.1x P / E.Cut target price by 6% to 7.5 yuan, corresponding to 19/20 41x / 35x P / E, with a potential increase of 20.6%.Maintain “Outperform” rating. Risks Uncertainty in the order and delivery of aerospace military products, the expansion of the civilian product sector was less than expected.