According to the third quarterly report of 2009, the operating income from January to September was 2.641 billion yuan, up 15.95% from the same period last year; the operating profit was 142 million yuan, up 28.96% from the same period last year; the net profit belonging to the owner of the parent company was 90.11 million yuan, down 2.92% from the same period last year; and basic earnings per share was 0.12 yuan.
The company's gross profit margin from January to September was 19.21%, an increase of 1.96% over the beginning of the year; the management expense rate decreased by 0.39% compared with the same period last year; the financial expense rate decreased by 0.15% from 1.15% in the same period last year; and the expense rate during the period was 13.07%, down 0.61% from 13.68% in the same period last year.
The company, formerly known as Shanghai Iron and Steel Automobile Transportation Co., Ltd., was listed in September 1993. In 1997, Shanghai Iron and Steel Automobile Transportation Co., Ltd. and its holding company, Shanghai Jiaotong Transportation (Group) Co., Ltd. implemented the overall asset exchange reorganization, changed its name to Shanghai Jiaotong Transportation Co., Ltd., and changed its main business to auto parts manufacturing. In August 2000 and June 2007, the company implemented public issuance and private placement respectively. After the issuance, the company formed three main business sectors: auto parts manufacturing and automotive post-service, transport and logistics services, passenger transport and water tourism services. There are five forms of land logistics, passenger transport, automobile maintenance, auto parts production and water tourism.
The auto parts and logistics business contributes most of the profits. According to the 2009 China News, the main business income of transportation shares was 1.642 billion yuan, the logistics industry accounted for 39.60%, auto parts manufacturing accounted for 37.80%, automobile services accounted for 11.70%, and passenger tourism accounted for 10.90%. Logistics and auto parts accounted for 77.40% of the total, contributing the vast majority of revenue.
Will benefit from strong car sales and a pick-up in logistics. The strong sales of cars since 2009 will drive the demand for spare parts, while the company's main suppliers, Shanghai GM and Shanghai Volkswagen, have excellent sales since 2009, and the parts companies affiliated to the company will benefit significantly. Affected by the international financial crisis, the company's logistics sector business income and profits are still negative compared with the same period last year, but the month-on-month has gradually improved, and the month-on-month growth is positive from March to May. The correlation between logistics business and macro-economy is very high, if the macro-economy stabilizes and picks up in the second half of the year, the company's logistics business will benefit significantly.
We estimate that the company's EPS in 2009 and 2010 will be 0.21 yuan and 0.27 yuan respectively, according to the closing price of 6.87 yuan on October 23rd, the corresponding dynamic price-to-earnings ratio is 35 times and 25 times respectively, maintaining the "neutral" investment rating of the company.
Risk Tip: upstream material rising risk of auto parts.
