From January to December 2010, the company achieved operating income of 669 million yuan, up 16.54% from the same period last year; operating profit was 107 million yuan, down 13.70% from the same period last year; and net profit belonging to the owner of the parent company was 87.97 million yuan, down 19.96% from the same period last year. Basic earnings per share is 0.37 yuan. It was lower than expected. Profit distribution plan: 0.5 yuan in cash for every 10 shares (including tax).
Falling demand for high-speed rail grinders is a drag on the company's performance. During the reporting period, as the revenue of high-speed railway gantry grinders decreased by 200 million yuan compared with the same period last year, the share of revenue from large gantry machines declined. The company's revenue from CNC machine tools grew steadily, up 12.09% over the same period last year; the gross profit margin of CNC machine tools was 35.89%, down 7.91 percentage points from the same period last year. The sharp decline in gross profit is due to a sharp decline in the share of high-margin high-speed rail grinders. The overall gross profit level of the company's CNC machine tools is still at a reasonable level.
The performance of ordinary machine tools is excellent. During the reporting period, benefiting from the strong demand for ordinary machine tools and the recovery of exports, the company's ordinary machine tools performed well, with revenue of 129 million yuan, an increase of 71.28% over the same period last year, and gross profit margin increased by 1.95% to 15.6%.
The rate of expenses increased during the period. During the reporting period, the expense rate during the company period was 13.84%, an increase of 1.73 percentage points over the same period last year, mainly due to the rapid expansion of the company and the increase in the rate of financial expenses and management expenses.
Challenges and opportunities coexist in 2011. The company's investment projects "East China heavy Industry", "CNC large machine tool technical transformation project" and "large casting technical renovation project" will release production capacity one after another in 2011, the product variety and technical content will be further improved, and the income is expected to rise to a higher level. What needs to be concerned is that although the demand for machine tools in China is strong and the industry is improving, we believe that the import substitution process of high-end machine tools is a long process, and it will take some time for domestic machine tools to be recognized by the market. At the same time, due to the impact of nuclear leakage in Japan, the progress of nuclear power plant construction in China may slow down, and the demand for large forgings may slow down. In 2011, the company will face both challenges and opportunities.
Profit forecast and investment rating: we expect the company's EPS from 2011 to 2013 to be 0.47,0.63 and 0.83 yuan respectively. According to the closing price of 24.88 yuan on March 30th, the corresponding dynamic PE is 53 times, 40 times and 30 times respectively, maintaining the company's "neutral" investment rating.
Risk hints: (1) the risk that the expansion of the new product market is not up to expectations; (2) the risk that the progress of the fund-raising project is not as expected.