The company released an interim report for 2011, with total revenue of 617 million yuan, down 6.81% from the same period last year; net profit of 41 million yuan, an increase of 20.01% over the same period last year; and basic earnings per share of 0.09 yuan. It is estimated that the operating performance from January to September 2011 will be between 57 million yuan and 74 million yuan, an increase of 0.030% over the same period last year.
Investment points: the slight decline in income is mainly due to periodic fluctuations in the industry, product prices are in a downward channel; net profit growth benefits from the upgrading of product structure, and high value-added products contribute more profits. The company's first-half income was 617 million, down 6.81% from the same period last year and 17.15% from the previous year; net profit was 40.78 million yuan, up 20.01% from the same period last year, down 6.17% from the previous year; and basic earnings per share was 0.09 yuan. The gross profit margin on sales was 15.95 percent, an increase of 2.16 percentage points over the first half of last year and a decrease of 2.34 percentage points over the second half of last year. The net interest rate was 6.61%, up from the same period last year. The rate of three items of expenses increased slightly compared with the same period last year, but decreased slightly compared with the previous year. Among them, the management expenses increased significantly, mainly from business hospitality expenses and employee wages and benefits. The significant decrease in financial expenses was mainly due to a decrease in interest expenses. The 120 million increase in inventory compared with the beginning of the year was mainly due to the increase in the company's low reserves of raw materials and inventory products.
The acquisition of Ningbo Vientiane shows benefits, and the profit mainly comes from the capacitive film products of the holding subsidiary. Nearly 60% of the revenue structure comes from BOPP and BOPET films, and nearly 50% of the gross profit structure comes from BOPP capacitor films. In the second half of the year, 12000 tons of ecological food composite film project will be put into production, and next year, 60, 000 tons of new functional BOPET packaging film project will be put into production. It is expected that the new capacity will bring year-on-year profits in terms of normal profitability.
The fixed increase project expands to the new energy field, has a broad prospect in the future, and is expected to become the main source of the company's profit growth.
The increase of the company has been examined and approved by the Securities Regulatory Commission. It is proposed to issue no more than 152 million shares and raise no more than 1.35 billion yuan to invest in three projects: high temperature resistant ultra-thin capacitor film, lithium battery diaphragm and solar cell back film, which is expected to bring nearly 1.474 billion yuan in income and 203 million yuan in net profit after reaching production. The company actively expands the areas of high-tech content and high added value, which is conducive to the further improvement of product structure and the level of comprehensive gross profit. At the same time, with the explosive growth of new energy vehicles and solar energy applications, the Dingzeng project may be put into production in 2013, bringing a substantial increase in revenue and profits.
Give the recommended investment rating for the first time. We forecast that the EPS of the company from 2011 to 2013 is 0.19,0.23 and 0.27 yuan respectively (excluding the proposed additional share capital). The investment rating of "recommended" is given for the first time, taking into account the uncertainty of the fixed increase project, the target price is not given for the time being, and it is recommended to pay attention to the progress of the fixed increase project.
Risk hint: BOPET industry overcapacity, prices and gross profit margin fell further. The progress of the fixed increase project is slow and lower than expected.
