The performance was significantly lower than expected
During the reporting period, the company achieved operating income of 397 million yuan, an increase of 6.8% over the same period last year, and the net profit belonging to the shareholders of the parent company was 10.22 million yuan, down 64.0% from the same period last year. It was significantly lower than our previous forecast that net profit would fall by about 5% from a year earlier.
Trend of development
Investment in the downstream food and beverage industry tends to be cautious, and companies are facing more fierce competition. On the one hand, the downstream beverage industry achieved sales revenue of 248.3 billion in the first half of this year, an increase of 14.56% over the same period last year, maintaining a low level, and the industry's capital expenditure is more cautious. On the other hand, as the global foreign giant Crones accelerates its layout in China, the company, as a domestic leader, is under greater competitive pressure.
Revenue has risen slightly and profitability has fallen sharply. In the face of sluggish demand in the industry and strategic competition from overseas giants, the company has made profit-making sales to some strategic customers by strengthening the development of strategic customers, resulting in a sharp drop in the gross profit margin of the main filling production line by 6.9 percentage points. At the same time, in order to open up the market and enhance competitiveness, the company's sales expenses and management expenses have also risen sharply, and the expense rate has increased by 2.8 percentage points during the whole period.
PET bottle blowing machine is still the advantage of the company. The company's PET bottle blowing machine is highly recognized in the market, and its products have maintained a gross profit margin of about 30%. In the first half of this year, the revenue reached 116 million, accounting for 29% of the revenue.
Beverage processing business is a bright spot. The company's beverage processing business significantly increased by 40% compared with the same period last year, exceeding 30 million yuan, but accounted for 7.5% of the company's income structure, with a gross profit margin of 21.3%, making a limited contribution to performance. The company announced on August 9 that it has invested in the establishment of a subsidiary company with Huaxin Group, which has a number of beverage brand agency distribution rights, with a 40% stake in the company, mainly engaged in the beverage processing industry. The beverage processing business is expected to contribute more performance in the future.
Profit forecast adjustment
For the time being, the forecast of 2013 and 2014 annual income of 820 million yuan and 990 million yuan, net profit of 0.31 yuan and 38 million yuan, and EPS0.16 of 0.2 yuan will remain unchanged.
Valuation and suggestion
The "neutral" rating is maintained at 2013 for the current share price and 28.3X for 2014, respectively.
