An overview of the first quarter results. In the first quarter, the company realized operating income of 149 million yuan, an increase of 41.2% over the same period last year; operating profit of 11 million yuan, an increase of 187.12% over the same period last year; net profit belonging to the parent company was 6 million yuan, an increase of 22% over the same period last year; and basic earnings per share was achieved.
Summary of the company's main business: 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, and the performance of the company in the first quarter has continued the trend of recovery since 2009.
Company performance analysis: in 2009, the company's main project Jiangnan first City Phase I sales completed, the current sales of Jiangnan first City Phase II project is good, will provide a guarantee for 2010 performance. The performance of this period increased by a large margin, mainly due to the carry-over income of the advance collection in the first city in the south of the Yangtze River. During the reporting period, the comprehensive gross profit margin of the company's main business was 34.32%, an increase of 5.52 percentage points over the previous year, the expense rate during the period was 22.51%, an increase of 4.17% over the previous year, and the company's asset-liability ratio was 41.91%. The amount of accounts received in advance was 75 million yuan, a decrease of 52.3% compared with the beginning of the year, due to the carry-over income from property sales.
The future development prospect of the company: the key problem facing the development of the company's real estate industry is the land reserve problem. The company's existing land reserves are mainly Shuiyushan land and Liaobu land, which are expected to last for 3-5 years. The Shuilianshan site, which the company's subsidiary cooperates with Dongguan Vanke, is expected to start in June 2010. The company's land in Liaobu Town has been named "Hongyuan Yuting Mountain" and is expected to start in the second half of the year. The company is currently looking for suitable land resources to increase the land reserve in a timely manner. In addition, in June 2009, the company jointly acquired a 60% stake in Weining County Jieli Coal Coke Co., Ltd., and initially tried to get involved in the field of mineral resources development. The company has the mining rights of the Waltaoping Coal Mine, with a production scale of 150000 tons per year and retained reserves of 6.8 million tons. The mine has now been put into production and sales, and is expected to contribute 69 million yuan in annual operating income. The scale of the coal mine is small, it is difficult to form a scale advantage in the short term, and it is greatly affected by the policy, and the business transformation of the company is difficult to be clear.
Earnings forecast and rating: the company's EPS is expected to be 0.05,0.08 and 0.09 yuan from 2010 to 2012, with a dynamic price-to-earnings ratio of 98 times, 67 times and 60 times on April 26, maintaining a "neutral" rating.