From January to September 2009, the company realized operating income of 396 million yuan, down 15.71% from the same period last year, operating profit of 40.07 million yuan, down 5.97% from the same period last year, and net profit belonging to the parent company of 28.08 million yuan, down 13.04% from the same period last year. Of this total, the operating income in the third quarter was 174 million yuan, an increase of 10.98 percent over the same period last year, and the net profit attributed to the parent company was 12.3 million yuan, an increase of 11.54 percent over the same period last year, and earnings per share was 0.12 yuan.
Results picked up in the third quarter. The company belongs to the metallurgical industry, the main product series are electric transmission devices, industrial computer control systems, industrial special testing and control instruments, power semiconductor components and so on.
According to data from the Bureau of Statistics, from January to August 2009, 540 enterprises in the metallurgical special equipment manufacturing industry achieved a total operating income of 53.34 billion yuan, an increase of 11.49% over the same period last year, and a total profit of 3.288 billion yuan, an increase of 2.18% over the same period last year. Total profits showed a momentum of month-on-month growth. The company's performance also kept pace with that of the industry, with indicators performing better in the third quarter than in the previous two quarters.
The comprehensive gross profit margin of the product is higher than the same period last year, and the expense rate is lower than the same period last year.
The comprehensive gross profit margin of the company's products in the first three quarters was 19.09%, an increase of 0.83 percentage points over the same period last year. The company's expense rate for the three periods was 8.01%, down 0.22 percentage points from the same period last year.
The downstream industries are too concentrated. According to the company's interim report, 88% of the company's revenue comes from the steel industry, and the downstream industries are too concentrated.
At present, the relative overcapacity of the steel industry is bound to lead to a decline in its willingness to invest, thus affecting the sales of the company's products. In the long run, the company's market development ability will be the key to future development.
Earnings forecasts and ratings. We expect the company's earnings per share in 2009, 2010 and 2011 to be 0.42 yuan, 0.55 yuan and 0.64 yuan respectively. According to the last trading day's closing price of 12.71 yuan, the company's dynamic price-to-earnings ratio in 2009 is 31 times, and we maintain the company's "neutral" investment rating.