From January to September 2009, the company realized operating income of 1.788 billion yuan, down 29.00% from the same period last year; realized total profit of 44.79 million yuan, turning losses into profits compared with the same period last year; realized net profit of 35.88 million yuan belonging to the owner of the parent company, turning losses into profits compared with the same period last year; and basic earnings per share was 0.09 yuan.
Nylon fiber, nylon chip prices increased business income in the third quarter compared with the previous quarter. In the third quarter, the average prices of nylon DTY and nylon 6 chips were 24082 yuan / ton and 19008 yuan / ton respectively, up 17.74% and 19.84% respectively from the previous quarter. The price increase made the company's operating income in the third quarter reach 699 million yuan, up 15.03% from the previous quarter.
The sharp reduction in the rate of three expenses has led to a month-on-month increase in the company's net profit. As the price of caprolactam, the main raw material, rose 20.93% month-on-month in the third quarter, higher than that of nylon fiber and nylon chips, the company's comprehensive gross profit margin decreased by 3.03% month-on-month to 9.03%. Although the gross profit margin has been reduced, the company's three expense rates have also dropped 2.06 percentage points from the previous month to 5.82%. The increase in income and the reduction in the rate of three items of expenses made the net profit in the third quarter reach 17.68 million yuan, an increase of 29.34% compared with the previous quarter.
The Ministry of Commerce issued a preliminary decision on the anti-dumping investigation of nylon 6 slices, which is good for the company. On October 19, 2009, the Ministry of Commerce initially determined that imported nylon 6 sliced products originating in the United States, the European Union and other places were dumped and decided to levy a deposit of 4% and 36.2%. With the preliminary ruling of the Ministry of Commerce on the collection of deposit for the import of nylon 6 slices, the import volume of nylon 6 slices will be affected, there will be a certain shortage of supply in the short term, while demand will continue to improve. The combined effect of improved demand and insufficient supply will lead to a rise in the price of nylon 6 slices. Meida shares is the leading enterprise in the nylon 6 chip industry, and it is also the only nylon 6 chip listed company. The Ministry of Commerce decided to bring benefits to Meida shares.
Risk hint.
(1) the uncertainty of crude oil price leads to the fluctuation of the price of the company's products and raw materials.
(2) the uncertainty of the degree of demand recovery.
Profit forecast and investment rating. We estimate that the earnings per share of Meida shares from 2009 to 2010 are 0.18,0.29yuan respectively. According to the closing price of 5.50yuan on October 28th, the corresponding dynamic price-earnings ratio is 31 times and 19 times respectively. Taking into account that the collection of margin for imported nylon 6 slices is expected to increase the price of nylon 6 slices, which will enhance the company's profitability, we maintain the company's "overweight" investment rating.