From January to June 2011, the company achieved main business income of 346 million yuan, down 2.80% from the same period last year; operating profit of 38.67 million yuan, down 33.03% from the same period last year; net profit belonging to the parent company was 38.27 million yuan, down 21.70% from the same period last year; and diluted earnings per share was 0.09 yuan.
Profitability returned to the historical average in the second quarter. The company's gross profit margin in the second quarter was 33.88%, up 11.77 percentage points from the previous year, basically the same as the same period last year. The company's second-quarter gross profit margin has returned to the historical average. On the one hand, because the gross profit margin of the previous orders is lower than the normal level, these orders have been fully digested. On the other hand, in the first half of the year, the income of modular deceleration motors with high gross profit margin (132 million yuan, gross profit rate 34.62%) and modular high precision reducer (revenue 86 million yuan, gross profit margin 29.09%) grew by 2.94% and 6.55% respectively, which was higher than the overall income growth level, which also contributed to the rebound of gross profit margin in the second quarter. In the future, with the continuous optimization of product structure and customer structure, the company's profitability will remain basically stable.
Restricted production capacity led to a decline in income in the first half of the year. In the first half of the year, the company's main products modular deceleration motors and modular high-precision reducers are single-digit growth, while the revenue of high-power heavy-duty gearbox is only 84 million yuan, a year-on-year decrease of 27.14%.
There is no significant increase in revenue from major products, the main reason is not on the demand side, but on the supply side. The company's main raw materials such as castings and forgings and other supply channels are not smooth, and to promote lean manufacturing to implement on-site transformation of some workshops, affecting the normal performance of production capacity, resulting in a decline in income. Production is expected to recover gradually in the second half of the year.
Industry development and wind power gearbox are the company's performance growth points. In the future, the company plans to participate in the competition in the high-end market and actively expand and develop wind power gearbox business to other industries. In terms of industry expansion, the company will effectively expand the market companies of lifting, water conservancy, building materials and mining by relying on three modular series products: modular deceleration motor, modular high precision reducer and modular motor; on the other hand, actively start the R & D and application of engineering ship transmission and petroleum transmission machinery. In terms of wind power equipment, the company will accelerate the R & D and industrialization of 2-3MW wind power gearbox to the market and make it a new profit growth point for the company.
It is estimated that the EPS in 2011, 2012 and 2013 will be 0.47 yuan, 0.54 yuan and 0.61 yuan respectively, corresponding to the latest closing price of 14.28 yuan, with a price-to-earnings ratio of 30 times, 26 times and 24 times respectively, maintaining the "overweight" investment rating.
Risk hint: the price of raw materials fluctuates sharply and the market expansion is not as expected.