From January to September 2011, the company achieved operating income of 2.174 billion yuan, an increase of 15.94% over the same period last year; operating profit loss of 251 million yuan, an increase of 160 million yuan over the same period last year; net profit loss of 233 million yuan (139 million yuan in the same period last year) belonging to the owner of the parent company; basic earnings per share-0.22 yuan.
In the third quarter of 2011, the company achieved an operating income of 693 million yuan, an increase of 19.1% over the same period last year; an operating profit of-93.12 million yuan; and a net profit of-84.09 million yuan belonging to the owner of the parent company. Basic earnings per share-0.08 yuan.
Multiple factors cause the company to increase income but not profit. The company was listed in 1998, is the world's only monosodium glutamate production enterprises using wheat as raw materials, in China's monosodium glutamate industry took the lead in obtaining ISO9001 international quality system certification, through the HACCP system certification. The company is located in Xiangcheng, Henan Province, which is located in the main wheat producing area in China, and has a unique advantage in location resources. However, the production and operation of the company during the reporting period is not optimistic. First of all, the increase in the price of raw and auxiliary materials such as the prices of domestic agricultural products during the reporting period, coupled with the increase in labor costs, pushed up the cost of the company's products; secondly, the production cost of monosodium glutamate products was also affected by the environmental protection and fermentation technical reform projects implemented by the company during the reporting period. In addition, due to the export of the company's products, and the long term of the export sales contract, the implementation price of monosodium glutamate abroad lags behind, which also aggravates the loss of the company's main business. During the reporting period, although the company's operating income increased by 15.9% compared with the same period last year, due to the influence of the above factors, the company's gross profit margin for the current period is only 0%.
The sales target for this year is 3 billion yuan. The next step of the company will focus on expanding the production capacity of monosodium glutamate and increasing the development and marketing of wheat industry as well as research and development. In 2011, the company aims to achieve sales revenue of 3 billion yuan, an increase of 11.19% over the previous year. The total cost of production and operation is expected to be 2.6 billion yuan, sales expenses are expected to be 140 million yuan, management expenses are 130 million yuan, and financial expenses are about 36 million yuan.
Profit forecast and investment rating. Since last year, the company's equity has been frozen, failed auction and other situations have occurred from time to time. In April last year, the company was put on file for investigation by the China Securities Regulatory Commission on suspicion of violating securities laws and regulations. so far, no latest disclosure has been made.
Due to the uncertainty of the company's future, we do not have a profit forecast for the time being and continue to maintain a "neutral" investment rating on the company.
Risk hint. 1) the risk of equity fluctuation of the company; 2) the risk of continuous decline in profitability.