According to the quarterly report of 2009, from January to September 2009, the company achieved operating income of 915 million yuan, down 29.38% from the same period last year; operating profit loss of 42.8944 million yuan; net profit loss of 47.7319 million yuan belonging to the parent company; and basic loss of 0.045 yuan per share. At the same time, the company expects to be attributed to the net profit loss of the parent company in 2009.
The company is mainly engaged in the production and sales of "Qingshan brand" paper bag paper and paperboard products, in addition, it is also engaged in the production, marketing and trade of alkali, electrical products, optoelectronic products, pharmaceutical products, wood and other products.
Market demand shrinks, production and sales decline. Affected by the impact of the international financial crisis on the real economy, the market of cardboard products closely related to export trade packaging continues to be weak, and the sales of cardboard and high-strength corrugated paper, which are the leading products of the company, have been seriously impacted. Product sales and prices have declined seriously, and volume and price have continued to operate at a low level, resulting in a decline in the company's operating income.
The cost increases and the gross profit margin decreases. Due to weak market demand, paper machine production pressure and underproduction, manufacturing costs are higher than the same period last year; at the same time, the company needs to digest the inventory of high-cost raw materials and finished goods at the beginning of the year, resulting in a 1.65% year-on-year decline in the company's comprehensive gross profit margin, which is lower than the expense rate during the period, resulting in a loss in operating profit and net profit.
The increase in the loss of asset impairment has increased the amount of operating profit loss. From January to September 2009, the company made provision for impairment of fixed assets, and the provision for inventory decline and provision for bad debts increased compared with the same period last year. As a result, the impairment loss of assets increased by 409.65% compared with the same period last year, increasing the loss amount of operating profit.
Net profit in 2009 is expected to remain at a loss. The sales market of the company's main products cardboard and high-strength corrugated paper is still grim, and the gross profit margin of the products is still low. Although there has been a turnaround since the second quarter, it is unlikely that the market will fully recover in the short term; and the company's optoelectronic products mainly sold abroad are also faced with the dilemma of serious weakening demand.
Earnings forecast and rating: we expect the company's EPS in 2009, 2010 and 2011 to be-0.044 yuan,-0.009 yuan and 0.004 yuan respectively, maintaining the company's "neutral" investment rating.
