In 2012, the company completed operating income of 650.877 million yuan, a decrease of 1.95% over the same period last year, and realized a net profit of 15.8388 million yuan, an increase of 235.99% over the same period last year. The net profit belonging to shareholders of listed companies after deducting non-recurrent gains and losses was 9.727 million yuan. As the company is undergoing a major asset restructuring, we suspend profit forecasts and investment ratings for the company.

Main points:

The company's performance is basically in line with expectations: in 2012, the company completed an operating income of 651 million yuan, of which the business income of the vacuum interrupter was 414 million yuan, basically the same as last year; the sealed pole products were 89.77 million yuan, a substantial increase of more than 42 million yuan over the same period last year The revenue of high voltage switchgear decreased from 83.59 million yuan to 20.02 million yuan, mainly because the company transferred the switch business to Xidan Baoguang Baoji Co., Ltd., for the stable transition of the business, the two sides signed an agency contract. During the reporting period, the contract extended by the business has been completed this year. In 2012, the company achieved a total net profit of 15.8388 million yuan, an increase of 235.99% over the same period last year; the net profit belonging to shareholders of listed companies after deducting non-recurring gains and losses was 9.727 million yuan. The company's performance is basically in line with our previous expectations.

Gross profit margin increased significantly: the company's overall gross profit margin in 2012 was 21.21%, up 4.6 percentage points from a year earlier. The gross profit margin of the leading product vacuum interrupter has increased significantly, mainly due to changes in product sales specifications, models and structures. in addition, product prices have stabilized and rebounded after fierce competition in the vacuum interrupter industry in the past few years. In addition, the purchasing prices of copper and silver copper solder raw materials dropped this year compared with the same period last year.

Taxes and fees increased slightly: business tax and additional 3.8269 million yuan, a decrease of 860400 yuan or 18.36% over the same period last year, mainly due to the reduction of value-added tax, urban construction tax and education fees payable this year; asset impairment loss was 1.4624 million yuan, an increase of 1.0245 million yuan over the same period last year, an increase of 233.99%, mainly for the increase in provision for bad debts in the current period The expenditure on income tax expenses was 1.2669 million yuan, an increase of 494300 yuan over the same period last year, or 63.99%. Due to the increase in profits this year, the corresponding income tax expenses increased.

Cash flow has improved: the company's annual net increase in cash flow was-26700 yuan, compared with-7.6872 million yuan last year. The net cash flow generated by operating activities was 18.6215 million yuan, compared with 3.0532 million yuan last year, an increase of 509.91% over the same period last year. Although the operating income in the reporting period decreased slightly compared with the same period last year, and the recovered payment was basically the same, the operating procurement expenditure in 2012 increased the payment of bills and reduced cash payments to maintain the normal operation of business activities. The net cash flow generated by investment activities was-37.5544 million yuan, compared with-39.6796 million yuan last year, a decrease of 5.36% over the same period last year. This year, due to increased investment in fixed assets due to production expansion projects, cash inflows from investment activities have increased. The cash flow of fund-raising activities was 19.3323 million yuan, compared with 29.4165 million yuan last year, a decrease of 34.28% over the same period last year, mainly due to the increase in loans for the implementation of production expansion projects during the reporting period.

The company is planning a major asset restructuring: according to the company's February 21 announcement, the restructuring will sell existing assets, buy new assets and introduce new industries through non-public offerings. In view of this, we suspend profit forecasts and investment ratings for the company.

Risk factors: the risk of uncertain schedule of asset reorganization.