From January to September 2009, the company achieved operating income of 890 million yuan, down 10.0% from the same period last year; operating profit of 26.28 million yuan, down 28.5% from the same period last year; net profit of owners belonging to the parent company was 23.86 million yuan, down 23.7% from the same period last year; and the basic EPS was 0.15 yuan. From July to September 2009, the operating income was 307 million yuan, down 11.7% from the same period last year; the operating profit was 11.55 million yuan, down 4.5% from the same period last year; the net profit belonging to the owner of the parent company was 10.39 million yuan, down 0.9% from the same period last year; and EPS was 0.06 yuan in a single quarter.
The decline in product prices and gross profit margin during the reporting period led to a decline in income and profit. The company's main business is the production and sales of wire rope, which is a necessary component or material in energy, transportation, machinery, chemical and other industries. From January to September 2009, due to the decline in raw material prices, the company's operating income fell by 10.0% compared with the same period last year; due to the increasingly fierce competition in the industry, the company's comprehensive gross profit margin decreased by 2.8 percentage points to 13.4%, resulting in a 23.7% year-on-year drop in net profit.
The company looks less important in the future. The wire rope industry is a completely competitive industry. in recent years, with the improvement of domestic production technology and the transfer of production from developed countries to developing countries, the competition pattern of domestic industry has shifted from low-end to high-end, so that the gap between the same industry is narrowing, and the company's advantages in the industry are no longer prominent, so the company's comprehensive gross profit margin has a downward trend in the future.
Profit forecast: the company is expected to achieve a net profit of 121500 yuan belonging to the owner of the parent company in 2009, down 8.8% from the same period last year. The company is given the profit forecast of achieving EPS of 0.19yuan and 0.25yuan respectively in 2009 and 2010. according to the closing price of 9.30yuan on October 27th, the dynamic Pmax E in 2009 and 2010 is 49 times and 37 times respectively, maintaining the company's "neutral" investment rating.
Risk tips: 1) the risk of uncertain recovery prospects in downstream industries; 2) the risk of raw material price fluctuations; 3) the single risk of product structure.
