In the first half of the year, the company realized operating income of 703.0804 million yuan, an increase of 9.70% over the same period last year, and a net profit of 13.1699 million yuan, an increase of 0.61% over the same period last year. The realization of basic earnings per share of 0.08 yuan, basically in line with expectations.
The growth of the company's operating income mainly came from the steel rope business, accounting for 73.47% of the steel rope business revenue in the first half of the year, and the steel rope business income increased by 11.9% compared with the same period last year. The lower increase in net profit is mainly due to a sharp increase in management fees compared with the same period last year, of which the cost of technological development alone increased by 6.4758 million yuan over the same period last year.
With the rising domestic inflationary pressure in the first half of the year, the company better responded to the rising raw fuel and labor costs, with the gross profit margin of its main business reaching 15.55%, an increase of 0.56% over the same period last year. The steel wire business achieved a turnaround, with a gross profit margin of 4.17% and a gross profit margin of 19.65% for the steel rope business, down 1.01% from the same period last year. Restricted by geographical location, the company's main products are sold to Southwest, East and South China. In the first half of the year, the company increased its sales in southern China, where operating revenue increased by 36.60% compared with the same period last year, the fastest increase among all regions. Secondly, the company has also increased its market development in the northeast and northwest regions.
According to the urban planning of Zunyi City, the company must "withdraw from the city and enter the park" to enter the industrial park. The company has used the original planned change of 220 million yuan in the steel cord production line to purchase the land use right of 1200 mu of industrial land, and the first land use certificate obtained in May this year has entered the construction project to calculate the land formation cost. The company will balance relocation with production and operation activities, and it is expected that the relocation will have little impact on the company's performance in 2011.
With the gradual weakening of inflationary pressure in the second half of the year, the company's raw fuel cost pressure will decline. It is estimated that the EPS in 2011 and 2012 will be 0.20 yuan and 0.27 yuan respectively. Corresponding to the previous share price, the dynamic PE is 44 times and 30 times respectively, with a high valuation and a "wait-and-see" rating.
