In the first half of the year, the company's main business income was 256 million yuan, up 26.25% from the same period last year; net profit was 14.5947 million yuan, down 34.87% from the same period last year; earnings per share was 0.05yuan, and return on net assets was 2.60%. The rise in the price of raw materials and the decline in the price of the leading product light film make the medium-term performance less than satisfactory.
The company has started mass production of electrical grade polypropylene film products below 5 microns in the second half of 2005, but due to the short time of mass production, market development and user authentication still take time. The company makes great efforts to develop large-scale power capacitors, high-temperature lighting electrical capacitors and other special capacitors, expand the self-use rate of high-end polypropylene film, and the profit will be greatly improved in the second half of the year.
It is worth paying attention to the trial production of the ultra-thin polyester film project of the joint venture between the company and South Korea SKC in October, the substantial breakthrough in the electric locomotive capacitor project, and the commissioning of the joint venture 6-PPD project with Langsheng in early 2007, which indicates that the company will usher in a new period of development.
During the "Eleventh five-year Plan", the investment in power grid and railway electrification will increase greatly, and the polypropylene film and AC capacitor industry will come out of the trough soon.
According to our performance forecast, the PE values of 2006 and 2007 corresponding to the company's current stock price are 24.77,14.00 times respectively; from the horizontal PE and PB valuation analysis among listed capacitor companies, the company's current stock price is close to the industry average valuation level; due to the commissioning of a number of Tongfeng projects from the end of 2006 to the beginning of 2007, the company's performance is expected to increase significantly. Keep the "recommended" investment rating unchanged.