Performance
From January to June 2013, the company achieved operating income of 5,777 million yuan, a year-on-year decrease of 0.34%, net profit attributable to shareholders of listed companies of 33 million yuan, a year-on-year decrease of 46.64%, and EPS of 0.029 yuan.
The product market position is stable
The bulldozer industry sold 5,484 units in the first half of the year, which is basically the same as the same period in 2012. From June to June, the company's leading product, bulldozers sold 3,794 units, a slight increase of 1.16% over the previous year. The company's market share increased 1.2 percentage points from 2012 to 63.44%, and the leading position in the industry was stable.
Profit depends on investment income
In the first half of the year, the company's operating profit was 24 million yuan, a year-on-year decrease of 56.55%. Among them, the quarterly operating profit for the second quarter was only 1.4 million yuan, while the investment income for the quarter was 22 million yuan, which was the main source of profit. The company's investment income in the first half of the year totaled 54 million yuan, a sharp increase over the previous year (loss of 1.7 million yuan in the same period in 2012). The increase in investment income was mainly due to the increase in net profit promoted by the company Komatsuyama.
Profit forecasts and investment advice
The company's semi-annual report fell short of expectations. We lowered our profit forecast for the company. We expect the company to achieve operating income of 10,738, 11,968, and 13,421 million yuan respectively in 2013-2015. Net profit attributable to shareholders of the parent company was 59, 81, and 110 million yuan respectively, and EPS was 0.05, 0.07 and 0.10 yuan respectively. The company's current stock price is equivalent to 67 times the 2013 PE forecast. Considering that industry demand has bottomed out, we maintain our “hold” investment rating.
Risk warning
The company's demand for earthmoving machinery products is closely linked to fixed asset investment. If the investment growth rate continues to decline, it will have a negative impact on industry demand
