The company's 10-year main income is 2.088 billion, an increase of 34.4% over the same period last year, and the net profit belonging to the parent company is 56.7 million yuan, corresponding to EPS0.14 yuan per share, which is much lower than market expectations. Among them, the net profit of Q4 dropped sharply by 97% from the same period last year, 94% from the previous month, and the profit per quarter was 0.00 yuan per share, mainly due to the increase in the price of raw coal and the increase in the cost of low-load operation of the system, which was higher than the increase in product prices.
The cost of coal rose faster than expected. Over the past 10 years, the prices of urea and ammonium nitrate have increased by 5%, 10%, and revenue growth is in line with expectations, while coal prices have increased by 20% to 600 yuan per ton. we estimate that the net profit will be affected by about 50 million yuan. Xinyi Coal Mine of the company is still under mine construction, and only a small part of the engineering coal output fails to bring the cost advantage of self-produced coal mines. We expect that under the background of keeping international oil prices at US $100 for 11 years, domestic coal prices are likely to continue to rise, and the company is still facing greater cost pressure.
The rate of expenses for the three items will be increased. In the past 10 years, the company's three-item expense rate increased by 1.3 percentage points to an all-time high of 15.8%, of which the sales cost rate increased to 4.7% from 3.4% last year, due to the company's new hydrogen peroxide production in the past 10 years, with a substantial increase in shipping distance and freight. Affected by equipment maintenance, the company's management expenses increased by 32% compared with the same period last year, and the rate of management expenses was flat. In order to meet the production needs, the company added 40% of long-term bank loans, while the increase in bank loan interest rates led to a 35% increase in financial costs compared with the same period last year, and we do not expect the expense rate to fall significantly in the future.
Operating capacity rebounded at the bottom. The company's 10-year total asset turnover and inventory turnover rebounded to 0.5 and 4.9 respectively from the bottom of 2009. The company's ROE level has rebounded significantly to 4% from an all-time low of 1.5% in 2009, still below the annual average.
In December, the company's controlling shareholder, Liuhua Group, introduced strategic investors to increase capital and shares, and its registered capital increased from the current 220 million yuan to 424 million yuan. We believe that through capital increase, the group is more likely to further acquire shares in Zhongcheng Chemical Co., Ltd. The company is currently under group trusteeship and has a production capacity of 600000 tons of hydrogen peroxide and 400000 tons of insurance powder. It has competition with Shengqiang Chemical Industry and may be integrated in the future.
We lowered the company's 11-and 12-year EPS to 0.35 and 0.45 yuan respectively, static PE33 times, the valuation is not cheap. In the long run, the company is the largest coal urea enterprise in Guangdong and Guangzhou, with regional advantages and maintaining the "overweight" rating. To some extent, the increase of stock holdings by senior executives reflects their confidence in the operation of the company.
Risk hint: the operation of the shell unit is unstable and the depressed demand for hydrogen peroxide in the market affects the performance improvement.