In the first three quarters, the company achieved an operating income of 420 million yuan, an increase of 15.11% over the same period last year; an operating profit of 61.74 million yuan, an increase of 25.07% over the same period last year; and a net profit of 38.64 million yuan attributed to the parent company, a sharp increase of 45.52% over the same period last year.
Among them, the company realized operating income of 172 million yuan in the third quarter, an increase of 63.9% over the same period last year, an increase of 36.44% compared with the same period last year, an operating profit of 23.25 million yuan, an increase of 41.6% over the same period last year, and a net profit of 12.19 million yuan belonging to the parent company, an increase of 90.54% over the same period last year.
Bright spot: the gross profit margin has fallen sharply, but the investment income has increased significantly, which may lead to an increase of more than 100% in 2009.
The company's own business profitability has not been strong. In the first three quarters, the company's gross profit margin fell sharply by 5.07 percentage points from a year earlier to 19.61%, of which the company's gross profit margin fell sharply by 12.59 percentage points to 17.66% in the third quarter from a year earlier. Main reason: it is estimated that the company's overseas business has been greatly affected, such as optical storage products.
The investment income helps the company to increase its performance greatly. The company achieved an investment income of 79.87 million yuan in the first three quarters, a sharp increase of 241% over the same period last year, of which the investment income in the third quarter was 29.63 million yuan, a sharp increase of 359% over the same period last year. A significant portion of the company's investment income comes from the Changfei technology business, which has a 25% stake. This year, the domestic optical fiber market is very prosperous, and the price of optical fiber has increased by about 15% compared with the same period last year. Changfei, as the leader of optical fiber and cable in China, has achieved substantial growth in its performance. It is expected that Changfei's contribution to investment income will exceed 100 million yuan in 2009, an increase of more than 200% over the same period last year.
Expectation: the investment income of the company may be affected by the risk of a decline in gross profit margin in the optical cable industry next year or due to price competition and other factors. (1) the cost and price of raw materials are gradually rising, such as PE, etc. (2) the barriers to entry of the optical cable industry are not high all the time. This year, due to the rapid increase in industry demand, the bargaining power of operators has declined, and next year, with the gradual increase in supply, product prices are likely to decline.
Profit forecast and rating: to sum up, the company will have a substantial increase in performance this year, relying on investment income. However, there will be some uncertainty next year. In line with the principle of prudence, EPS is expected to be 0.29 yuan and 0.28 yuan from 2009 to 2010. Based on the closing price of 9.92 yuan on October 30, 2009, the corresponding dynamic price-to-earnings ratio is 34 times and 35 times, maintaining the company's "neutral" investment rating.
Risk tips: (1) the downstream customers of optical cable products are mainly monopolistic oligopoly manufacturers, there is a risk of product price decline; (2) there is a large demand for optical fiber in 2009, there is a risk of tight supply and price increase.
