In 2010, the company achieved operating income of 717 million yuan, an increase of 79.3% over the same period last year; operating profit of 40.71 million yuan, compared with-47.72 million yuan in the same period last year; net profit belonging to the owner of the parent company was 21.12 million yuan, compared with-38.51 million yuan in the same period last year; and EPS was 0.15 yuan. The company's performance is in line with expectations.
We will turn losses into profits in 2010. In 2010, driven by the car sales of more than 18 million vehicles in China, the company stepped up its market development efforts, and 14 new clutch main engine factories were added in this department. At the same time, the market share has been further expanded by investing in 2.5 million sets of clutch capacity projects to expand production capacity. In 2010, the income of the main business was 703 million yuan, an increase of 82.16% over the same period last year. In 2011, the company will continue to increase the development of new markets and new products, and strive to set 18 key manufacturers of clutches in the supporting market (8 for heavy vehicles, 5 for cars, 5 for medium and light duty). Hydraulic parts set 5 key supporting manufacturers), accessories market set 7 key areas. The company will also improve the technical level of its products and build a clutch product structure with heavy vehicles and cars as the core. The company expects to achieve operating income of 840 million yuan in 2011, an increase of about 17% over the same period last year.
The gross profit margin increased by 9.75% over the same period last year, and the expense rate decreased by about 7.7% over the same period last year. In 2010, the company's comprehensive gross profit margin increased by 9.75 percentage points year-on-year to 28.99%; the expense rate fell 7.65 percentage points year-on-year to 20.33%. It mainly benefits from the scale effect brought by the company's rising sales. We expect the company's profitability to continue to improve in 2011.
Clutch production capacity improvement project continues to move forward. The company's original annual production capacity of clutch is 1.3 million sets, and it is expected that the production capacity will reach 2.5 million sets in the first half of 2011. On this basis, the company plans to continue to implement the clutch capacity project, increase the clutch production capacity to 3.6 million sets, focus on enhancing the car clutch production capacity, and consolidate the competitive advantage of heavy vehicle clutch. The increase in production capacity will help the company to further expand its market share and enhance its profitability, and we are optimistic about the company's competitive advantage and development prospects in the clutch market.
Profit forecast and rating. It is estimated that the EPS of the company from 2010 to 2012 is 0.20,0.26,0.33 yuan respectively. Based on the closing price of 15.13 yuan on April 15, the dynamic price-to-earnings ratio is 76 times, 58 times and 46 times respectively. Consider the obvious improvement in performance, and the increase in production capacity to further enhance the company's profitability and maintain the "overweight" investment rating.
Risk hint. 1) the risk of clutch sales is lower than expected; 3) the implementation progress of clutch technical renovation project is lower than expected risk.