The performance was lower than expected

In 2010, the company achieved operating income of 582 million yuan, an increase of 37.20% over the same period last year; the total profit was 44.8515 million yuan, up 20.22% over the same period last year; the net profit of shareholders belonging to listed companies was 36.3865 million yuan, up 18.92% over the same period last year; and the corresponding earnings per share was 0.0957 yuan, much lower than expected. First, Tianjin pump Machinery Group was not incorporated into the statement, and second, the performance of GIS switch products was lower than expected.

The profitability of the main business is poor, and the income from investment is still the main source of profits.

The company's main products are electrical equipment and tungsten and molybdenum products, the product competitiveness is poor, profitability is not strong, in 2010 EBIT is less than 6 million, the comprehensive gross profit margin level further dropped to 16.2%. However, in the same period, the investment income of the company reached about 38.3 million yuan, of which about 10 million was obtained by participating in Tianjin Special change, and the rest was the investment income from the disposal of transactional financial assets and available-for-sale financial assets.

Baili Sifang and Tianjin pump Machinery Group will be the main sources of profit in 2011.

Baili Sifang is mainly engaged in substation automation systems, dispatching automation systems and smart grid related products. After its establishment at the end of 2010, the company achieved more than 200,000 profits, with strong profitability, and is expected to bring hundreds of millions of yuan in revenue to the company in 2011. contribute tens of millions of profits. At the same time, Tianjin pump Machinery Group will be incorporated into the company's statement, which is expected to bring about 20 million of the company's profits every year in the future.

The process of additional issuance is lower than expected, and the superconducting current limiter is expected to contribute to the performance in 2012.

At present, all the project audit, evaluation and related work determined by the additional issuance of the company have been completed, only there are some obstacles in the cooperation of the superconducting current limiter project, and the company is expected to complete the decision-making process of the board of directors in the first half of the year. In addition, it is reported that the 220KV superconducting current limiter will soon be put into operation in Tianjin. We believe that the operating performance of the 220KV superconducting current limiter will accelerate its market promotion, and it is expected that the superconducting current limiter will begin to contribute to the company's performance in 2012.

Profit forecast and investment rating

Regardless of the additional issuance projects, the company's EPS from 2011 to 2012 is expected to be 0.15 yuan and 0.17 yuan respectively. We believe that after the completion of the additional issuance of the company, projects such as superconducting current limiter will form the core competitiveness of the company. In the long run, there is still a lot of room for the company's stock price to give the company a "highly recommended" rating.