Summary of the results for the first three quarters of 2009. From January to September 2009, the company achieved operating income of 326 million yuan, an increase of 38.53% over the same period last year; operating profit of 19 million yuan, compared with a loss of 3 million yuan in the same period last year; net profit belonging to the parent company was 15 million yuan, an increase of 220.14% over the same period last year; and earnings per share was 0.0251 yuan. Of this total, the operating income in the third quarter was 115 million yuan, an increase of 85.42% over the same period last year, and the net profit belonging to the parent company was 8 million yuan, an increase of 148.7% over the same period last year.
Overview of the company's fundamentals: the company's main residential development and industrial plant leasing, the business is mainly located in Dongguan, Guangdong. Since 2008, affected by the global financial crisis and the adjustment of industrial structure in Guangdong, the volume and price of Dongguan property market have fallen. Since 2009, real estate investment in Dongguan has dropped by 40% compared with the same period last year, and the real estate industry is mainly focused on digesting inventory. The company has a good reputation in the local area, and its performance has picked up rapidly since 2009. By the end of the reporting period, the amount received by the company in advance reached 176 million, an increase of 102.53% over the beginning of the year, mainly due to the analysis of the three quarterly reports of the company with unrecognized income: the company made a net profit of 19 million yuan in the first three quarters, turning losses into profits, mainly due to the rebound in the real estate industry, increased sales and transfers prepared for falling inventory prices. The company's sales expense rate, management expense rate and financial expense rate were 5%, 10% and 5%, respectively, compared with 9.6%, 12.1% and 6.8% in the same period last year. The net cash flow of the company's operating activities increased by 277.58% over the same period last year, and the operating situation has improved. The asset-liability ratio is 45.45% and the financial situation is good.
The company's performance outlook. With the macro-economic recovery in China and the acceleration of the recovery in the European and American markets, the external and domestic demand will improve in 2010, which will lead to the heating up of the property market in Dongguan and the increase in the demand for industrial factories. We are cautiously optimistic about the company's future performance.
According to the full-year profit forecast disclosed in the company's third quarterly report, the company's annual profit in 2009 is expected to reach 20 million yuan, corresponding to the 2009 EPS of 0.0321 yuan, based on the closing price of 4.94 yuan on October 26th, the corresponding PE is 153times.
Risk hint. The real estate industry in Dongguan, where the company's main business is located, is greatly affected by domestic and external demand, so investors are advised to pay close attention to the recovery of internal and external demand.