Summary of the results in the first quarter of 2011: the company's operating income in the first quarter of 2011 was 145 million yuan, down 3.02% from the same period last year; operating profit was 15.14 million yuan, up 37.91% from the same period last year; and the net profit belonging to the parent company was 8.36 million yuan, up 38.92% from the same period last year.
The increase in performance is mainly due to the increase in comprehensive gross profit margin. The company is mainly engaged in real estate development and coal mining, of which the real estate development is mainly distributed in Dongguan, Guangdong Province. At present, the project rights and interests reserve is about 765000 square meters. The coal mine business company is currently mining waltaoping coal mine reserves of about 6.858 million tons, with an annual production scale of 150000 tons, and is currently carrying out declaration work to expand its capacity to 300000 tons / year. The increase in the company's performance in the first quarter of 2011 was mainly due to the increase in gross profit margin, which was 43.3% in the first quarter, an increase of about 9 percentage points over the same period last year. The main reason is that the average price of real estate projects sold during the period is higher (Jiangnan first City Phase II) and the coal business tends to be stable compared with the same period last year.
The reserve of real estate projects is relatively small. The company has no new reserves in the first quarter, and the projects sold in 2011 are mainly the Jiangnan first City Phase III and the Shuilianshan project in cooperation with Vanke (the company holds a 50% interest), of which the first phase of the Feilishan project opened in April. Liao step project Yutingshan started in the second half of 2011, the overall scale of the company's real estate project reserve is small, and the company needs to pay attention to the company's replenishment of inventory in the future.
Sales have risen sharply, and financial pressure has not improved yet. The cash received by the company for selling goods and providing services in the first quarter was 232 million yuan, an increase of 231% over the same period last year, and the amount received in advance was 175 million yuan, an increase of 101% over the beginning of the year. The company's real estate project sales were good in the first quarter. As of the end of the first quarter of 2011, the company's paper cash was 117 million yuan, accounting for 36% of short-term borrowings. The company expects project capital expenditure of about 245 million yuan in 2011, mainly for real estate project development and coal mine construction. In the short term, the company is still under great financial pressure. The real asset-liability ratio is 36.32%, down 4 percentage points from the beginning of the year, and long-term financial leverage is not high.
Profit forecast and investment rating. We expect the company's EPS in 2011-2012 to be 0.09yuan and 0.10yuan, calculated at yesterday's closing price of 4.71yuan, with a dynamic price-to-earnings ratio of 52 times and 47 times, the company's real estate business growth space is relatively small, the main focus in the future lies in the coal mine capacity expansion and the prosperity of the coal industry, maintaining a "neutral" rating.
Risk hints: the project sales and development progress may not meet expectations, and there are uncertainties in mineral resources development conditions, environment, industrial base and so on.