According to the quarterly report of 2009, from January to September 2009, the company achieved a total operating income of 397 million yuan, a year-on-year decrease of 28.72%, an operating profit loss of 47.8559 million yuan, a net profit loss of 46.9478 million yuan belonging to the parent company, and a basic loss of 0.45 yuan per share. At the same time, the company expects the annual performance in 2009 to be a serious loss.
The company's main business is the production and operation of paper and paper products. The company is one of the largest production bases of newsprint, food packaging base paper and cultural paper in western China.
Production and sales fell sharply, resulting in a loss of net profit. From January to September 2009, affected by the spread of the international financial crisis to the real economy, the company's paper market was in the doldrums, sales were weak, and the prices of major products fell sharply, resulting in a decrease in business income compared with the same period last year. At the same time, the company still needs to digest the previous high-priced raw material inventory, which makes the raw material cost price high, while the company can not produce at full load and fix production by sales, which leads to negative comprehensive gross profit and loss of operating profit and net profit.
During the period, the expense rate increased and the operating profit loss increased. Affected by the economic crisis, underemployment caused parking losses and increased management costs. From January to September 2009, management expenses increased by 28.13% compared with the same period last year, making the expense rate increase by 3.59% year-on-year, increasing the loss of operating profit.
Profit forecast and rating: according to our profit forecast, the company's EPS is expected to be-0.60,0.37 and-0.21 yuan in 2009, 2010 and 2011, respectively.
As the company's comprehensive gross profit margin is far lower than the period expense rate, the company is in a situation of more and more losses. If the company fails to raise its gross profit margin effectively, the company is still more likely to face losses. We downgraded the company to "underweight" investment rating. The company's shares closed at 7.69 yuan on October 27, 2009.
Risk tips: 1) the company's current comprehensive gross profit margin is far lower than the period expense rate; 2) there is still some uncertainty in the macro-economy; 3) the risk of a decline in gross profit margin caused by intensified market competition.
