Events:
The company announced the 2010 annual report, during the reporting period, the company's main products optical lenses, optical lenses respectively reached 174.38 million, 36.04 million, optical lens output reached a record high. For the whole year, the operating income was 1.4640144 billion yuan, an increase of 56.67% over the same period last year; the operating profit was 93.5936 million yuan, an increase of 11.86% over the same period last year; and the net profit belonging to the owner of the parent company was 54.8616 million yuan, up 17.26% over the same period last year. EPS0.23 yuan.
Comments:
1. Rapid income growth
With the continuous improvement of the demand for the quality of mobile phone lenses, the popularity of digital cameras and SLR digital cameras, and the rise of micro-projection and 3D photography. The demand for optical components increases. As a big company in this small industry, the rise of the prosperity of the industry brings good opportunities for the development of the company. The company has recently entered Samsung's supply chain, and future performance growth should be guaranteed. At present, the company's orders are still full, and revenue is expected to maintain rapid growth. 2. Gross profit margin continues to decline.
As a processor, the profit level of the company is suppressed downstream, so it is difficult to improve the gross profit margin. The gross margin of the optical processing business, which accounts for the largest proportion of revenue, has been on a downward trend since 2006. Due to the positioning of the company's products and business, the company's bargaining power is not high, and the future gross profit margin of the company is limited.
3. Management costs have risen sharply.
The company is a labor-intensive enterprise, with more than 10,000 registered employees at present, and the company's management expenses have always accounted for the most important part of the company's expenses. The change of management expenses has a great impact on profits. The sharp rise in management fees in 2010 is also the main reason why the company's performance is lower than market expectations. The company is currently actively developing new products, and it is expected that the management cost will remain high.
As the current profit scale of the company is small, with the improvement of wages and social security level, the company's labor costs rise, the company's current gross profit margin is not high, the rise of labor costs has a greater impact on the company's profits.
4. Actively develop new products
The new management of the company is also actively looking for breakthroughs in the company's business on the basis of traditional business, and the company is currently involved in the fields of precision metal processing, CCTV lenses and 3D photography. The company has the largest precision metal processing base in East China. In 2010, the company set up a joint venture to distribute CCTV lenses to launch a number of samples, two of which will be selected to open up the market in 2011. The company's high-definition CCTV lens has obvious price advantages compared with foreign products, in the face of the huge security market, the company's related business is optimistic.
5. Investment suggestions
Based on the previous analysis, we initially estimate that the company's performance per share from 2011 to 2012 is 0.29,0.37 yuan respectively. Based on a comprehensive comparison of the valuation of relevant listed companies in the industry, we downgrade the rating to "neutral".
