In the first quarter of 2011, the company achieved an operating income of 36.74 million yuan, a decrease of 23.6% compared with the same period last year. The operating profit was-6.16 million yuan in the same period last year, and the net profit attributed to the owner of the parent company was-1.75 million yuan, realizing basic EPS-0.01 yuan.
The new production line raises the gross profit margin. The company's main business is the production and sales of MDF and lumber. there are three MDF production lines, two of which have an annual output of 30, 000 cubic meters and 80, 000 cubic meters, respectively. the equipment of these two production lines were introduced in 1997 and 2003 respectively, and their competitiveness is relatively weak. the third production line with an annual output of 210000 cubic meters was officially put into production in October 2010. the new production line is relatively competitive, and during the reporting period The company's consolidated gross margin rose 14 percentage points to 27.4%.
Due to policy constraints, the timber business failed to contribute significantly to its performance. The company has 1.81 million mu of woodland, including 1.61 million mu of commercial forest and 200000 mu of natural forest. The profitability of the timber business is strong, and the gross profit margin is more than 40%. However, restricted by the cutting policy, the timber business failed to contribute significantly to the performance during the reporting period.
During this period, the expense rate has increased significantly. During the reporting period, the expense rate during the company period increased by 9.6% year-on-year to 35.4%. Fortunately, the management expense rate and sales expense rate decreased in varying degrees, while the financial expense rate may increase by 149% year-on-year as a result of the new production line and the cessation of interest capitalization, and the financial expense rate increased by 11.9% to 17.2%. It is expected that with the gradual release of production capacity. During this period, the expense rate will gradually decrease.
Look at the future. The company's annual output of 210000 cubic meters of medium density fibreboard expansion project has been put into production in October 2010, supporting 160000 mu of fast-growing eucalyptus raw material forest base project is still in the construction period. At present, the improvement of the company's profitability by the new production line has been initially shown, and the company's profitability is expected to improve in 11 years, but in view of the judgment of serious overcapacity in the industry, we do not expect too much from the company's performance for the time being. In contrast, we pay more attention to the 1.81 million mu of woodland owned by the company, and once the country relaxes the restrictions on cutting targets, the timber business will usher in explosive growth.
Profit forecast and investment rating. The situation of serious overcapacity in the MDF business is difficult to change for the time being, and the gross profit margin of the main business is low. Although the competitiveness of the new production line has been improved, with the issuance of the "Emergency notice of Fujian Forestry Department on suspending Natural Forest cutting", the supply of branch materials in the province will decline sharply in the next few years, and the supply and price of raw materials will also suppress the company's performance. We will not make a profit forecast for the company for the time being. Maintain a "neutral" investment rating.
Risk hint. 1. The adjustment of the furniture and building materials industry leads to the risk of a decline in demand for the company's products. two。 The risk of large fluctuations in raw material prices.