According to the quarterly report of 2009, the operating income from January to September was 313 million yuan, down 11.52% from the same period last year; the operating profit was 10.41 million yuan, compared with a loss of 4.37 million yuan in the same period last year; the net profit belonging to the owner of the parent company was 16.16 million yuan, an increase of 23.23% over the same period last year; and basic earnings per share was 0.046 yuan.
The reduction of the sales expenses of the subsidiary tourism company of the company resulted in a decrease of 240000 yuan, or 85.33%, compared with the same period last year; during the reporting period, the decrease in bank loans coupled with the reduction of interest rates resulted in a reduction of 690000 yuan, or 31.04%; the shipping company, a subsidiary of the company, sold assets last year and adjusted the asset impairment loss, resulting in an asset impairment loss of 4.54 million yuan, or 83.35% During the reporting period, due to the reduction in oil prices, the oil price subsidy income decreased by 12.37 million yuan, or 55.26%, in non-operating income.
Transportation business constitutes the company's main business, in the short term, the company inland river passenger roll, passenger transport still occupies a comparative advantage. The company has 34 ships on the Shenzhou-Chong route, with an average of more than 260 voyages a day, six ports, 75% of the market share for passengers and 80% for vehicles.
The real estate business is expected to contribute revenue to the company one after another from next year. The nearly 100000 square meter commercial housing project of "Chongming Metro lot 24" controlled by the company has entered a substantial construction stage and is expected to provide new growth points for the company's performance next year.
The construction of the Shanghai Yangtze River Tunnel and Bridge (Chongming River Crossing) project is expected to open in 2010, bringing opportunities as well as great challenges to the company's main business. The company has made medium-and long-term development plans to ensure the sustainable development of the company after the opening of the Yangtze River Tunnel and Bridge in Shanghai.
Maintain the company's "neutral" investment rating. We expect the operating income of the company in 2009 and 2010 to be 4.3 yuan and 490 million yuan respectively; the net profit attributable to the parent company is 3299 yuan and 42.88 million yuan respectively; and the diluted earnings per share are 0.09 yuan and 0.12 yuan respectively. According to the closing price of 9.30 yuan on October 26, the corresponding price-to-earnings ratio is 103 times and 77.5 times respectively. We believe that the company's share price basically reflects various expectations and maintains a "neutral" rating. Considering the opportunity of Chongming's large-scale development, investors are advised to pay attention to it for a long time.
Risk hint: after the opening of the Yangtze River Tunnel and Bridge in Shanghai, the freight rate is lower than the waterway price of the Shen-Chong line.
