Benefiting from the boom in high-speed rail construction, the company's performance in 2009 is eye-catching. The company released its annual report today. Although it has experienced an unfavorable market environment, through optimizing its product structure and relying on national key projects, the company realized operating income of 573.92 million yuan in 2009, an increase of 36.38% over the same period last year, and a net profit of 115.97 million yuan, an increase of 128.64% over the same period last year. In 2009, the company achieved earnings per share of 0.97 yuan, which was lower than we expected, mainly because the delivery of Borg plate machine tools was lower than we expected. In order to ensure sustainable development, the company plans not to allocate cash and increase it this year.
The company has achieved remarkable results in upgrading its product structure. Positioning the high-end field of the machine tool industry is the company's long-term development goal, especially since listing, with the company's keen judgment on the development of the industry, the optimization process of the company's product structure has been significantly accelerated: the proportion of the company's CNC machine tool revenue has increased from less than 30% in 2005 to 78.42% in 2009, while in 2009, with the help of the development of national key projects, the company's product structure optimization has developed by leaps and bounds. In 2009, the revenue of CNC machine tools increased by 20.54% compared with 2008. Compared with counterparts in the industry, the optimization of the company's structure has been in the forefront of the industry.
The completion and commissioning of fund-raising and other projects is the key to determine whether the company can achieve steady growth in 2010. The company's CNC cylindrical grinder production project, CNC roll grinder production project is about to enter the harvest period; the introduction of technology, the company's implementation of parallel machine tool production project is also expected to achieve revenue this year; the sale of new products such as moving beam moving shaft gantry machine tool, gantry CNC guideway grinder is expected to be strong. The completion and commissioning of the above projects can effectively make up for the decline of special machine tools for track plates, and the company is expected to achieve a smooth transition in 2010.
In view of the impact of changes in gross profit margin and tax rate, and not considering the contribution of SEOs and East China heavy Industry for the time being, we downgrade the company's performance forecast for 2010. The company's EPS for 2010-2012 is expected to be 1.06 won 1.29xt. The growth rate of net profit in the next three years is 9.37%, 21.97% and 28.69%, respectively, and the corresponding PE is 42.45,34.88 and 27.11 times, respectively. The next two years is still a critical period for the transformation of the company, we are optimistic about the long-term development of the company, however, after the rapid growth in 2009, the growth rate will stabilize in 2010. At present, the valuation of the company has been fully reflected, we temporarily downgrade the company's rating to "neutral".
Risk factors: fund-raising projects can not be put into production as scheduled, macro-tightening policies, rising steel prices, export recovery is lower than expected, and so on.