In anticipation of a slight decline in the company's performance, the company's 2011 report showed that the company achieved total revenue of 2,371 million yuan, an increase of 7.32% over the same period of the previous year; realized a total profit of 192 million yuan, down 7.24% from the same period last year; realized net profit attributable to shareholders of listed companies was 149 million yuan, down 15.54% from the same period last year; the comprehensive gross profit margin of the product was 23.30%, down 1.2 percentage points from the previous year. The decline in profitability led to no increase in the company's revenue and profit.
The scale of the construction machinery transmission business increased slightly, achieving business revenue of 1,121 billion yuan, a year-on-year increase of 11.91%, a gross profit margin of 17.56%, a year-on-year decrease of 3.2 percentage points. Profitability was clearly affected by the downturn in the downstream construction machinery boom; the company sold 37,121 loader transmissions throughout the year, with a market share of about 15%; 5,167 roller transmissions, with a market share of 23.9%; 4096 grader transmissions, with a market share of about 80.9%. The scale advantage is still obvious.
Leading enterprises benefit from the “Three Foundations” industrial plan. According to the “12th Five-Year Plan” for the “three bases” industry issued by the Ministry of Industry and Information Technology, oversized, high-parameter gears and transmission assembly are key development areas. As a leading domestic gear transmission enterprise, the company will inevitably benefit from industrial policy support. According to the annual report, the company's annual non-operating income reached 31.78 million yuan, an increase of 76.44% over the previous year (net income outside of operations for the fourth quarter was 15.5 million yuan), and the company received 22.59 million yuan in subsidies from the government throughout the year, an increase of 53.36% over the previous year, with an outstanding industrial position.
The profit distribution plan proposed by the company's board of directors is to distribute a dividend of 0.91 yuan (tax included) for every 10 shares, a total cash dividend of 36,405,460.00 yuan (tax included), and the remaining profit that can be distributed to shareholders is 246,357,289.70 yuan for annual distribution after carry-over. The profit distribution plan must be submitted to the company's 2011 Annual General Meeting of Shareholders for consideration and approval.
Profit forecast and investment advice: After entering 12 years, the company's downstream demand has not improved significantly. It is expected that the company's year-on-year performance in 2012 may show a trend of low and then high. The company set a business target for 2012 as annual operating income of 2.6 billion yuan, and keeping expenses within 385 million yuan. We forecast EPS of $0.40, $0.45, and $0.53 for 12-14, respectively, giving the company a “hold” rating.
Risk warning: Loader industry sales have declined sharply