The company's third-quarter report shows that in the first three quarters of 2010, the company's operating income was 386 million yuan, down 6.3% from the same period last year; operating profit was 1.57 million yuan, down 89.2% from the same period last year; the total profit was 4.72 million yuan, down 74.9% from the same period last year; the net profit attributed to the parent company was 3.55 million yuan, down 74.9% from the same period last year; earnings per share were 0.015 yuan.
Performance analysis. The company's performance is basically in line with our previous expectations. 1. The decline in the company's performance is due to the decline in gross profit margin. In the third quarter of 2010, the company's comprehensive gross profit margin was 15.2%, down 5.1% from the same period last year, mainly because cost growth was greater than revenue growth. Operating income in the third quarter was 145 million yuan, up 2.8% from the same period last year, and operating cost was 123 million yuan, an increase of 9.3% over the same period last year. 2. During the period, the expense rate decreased to improve performance. In the third quarter of 2010, the company's period expense rate was 12.6%, down 0.5% from the same period last year, of which the sales expense rate was 4.4%, up 1% from the same period last year, mainly due to the increase in bagged cement sales; the management expense rate was 8.6%, down 1.1% from the same period last year; and the financial expense rate was-0.4%, down 0.4% from the same period last year, mainly due to the maturity of interest income in the current period. 3. Reduce the impairment of assets and improve performance. The impairment loss of the company's assets in the first three quarters of 2010 was 2.82 million yuan, a decrease of 58.56% compared with the same period last year, mainly due to the reduction of asset impairment losses in the current period.
The transfer of mine assets still needs to wait. During the share reform in 2007, the company promised to transfer mine resources, but considering that the Taiyuan Municipal Government put forward the Xishan ecological construction plan in the second half of 2007 and the idea of relocating chemical and building materials enterprises in Xishan area, this matter is being demonstrated recently. before the introduction of the plan, the group company has not yet been able to implement the commitment to transfer mine resources during the share reform.
Profit forecast and rating. We expect the company's earnings per share in 2010, 2011 and 2012 to be 0.02,0.02 and 0.03 yuan respectively. Based on the closing price of 8.26 yuan, the corresponding dynamic PE is 523,344,261 times, maintaining the company's "neutral" rating.
