According to the revised announcement of the performance forecast, the company expects to achieve a year-on-year decline of about 35%, 65%, and about 55.14 million-102.4 million yuan in net profit attributed to shareholders of listed companies in 2011.
The main point of investment in 2011 is that the annual adjustment is affected by the adjustment of industrial layout, and the company's annual net profit has decreased by 35% 65%. We expect it to be mainly manifested in four aspects: 1) market expansion of new business and high investment in R & D of new products; 2) upfront investment in fund-raising projects, pushing up management and manufacturing costs; 3) intensified market competition, exchange rate, raw materials, labor and other external environment. 4) the relocation of some factories has affected the production progress.
From the perspective of business strategy, the company defines 2011 as the year of transformation, so the performance pressure is lighter, and it is expected that it will be more aggressive in the handling of expenses (that is, taking the provision of the current year, not capitalization), in order to be young.
Metal sheet metal business pressure at both ends of the metal sheet metal business is the company's main business, mainly divided into two pieces: plasma TV and LCD TV heat dissipation board and communication cabinet. The company is Panasonic's world's only TV radiator plate mold manufacturer and the world's three largest heat sink plate suppliers. However, compared with the strong purchasers, the company is always faced with the dilemma of insufficient bargaining power due to the limited technical content. In the general environment of rising labor costs, the decline in product sales prices has accelerated the decline of the company's profitability.
In the second half of 2010, Hope Co., Ltd. jointly established two joint ventures with Shanghai Volkswagen, Xinpenlianzhong parts Company and Xinlian Auto parts Company, mainly supporting "four doors and two covers" for Volkswagen-related models, that is, the inner and outer panels of the hood, the inner and outer panels of the rear cover, and the inner and outer panels of the doors. The known supporting models are Tuguan, Tuan, Linku, Hao Rui and Mingrui. At present, both projects are under construction, equipment is under procurement, and initial production capacity is expected to be released in mid-2012 and in early 2013.
For the first time, give "neutral" rating companies to seek transformation, the future breakthrough direction is set for auto parts and brushless motors. We are optimistic about the company's "four doors and two covers" project for Shanghai Volkswagen, and are cautiously optimistic about the transformation of the company's motor business from OEM to ODM.
From 2011 to 2013, the company's EPS is expected to be 0.28,0.42 and 0.64 yuan respectively, and the company's current share price is 9.16 yuan, corresponding to 33 times, 22 times and 14 times PE, respectively. The current valuation is reasonable and we give the company a "neutral" investment rating.
Risk tips: 1. The progress and profitability of the "four doors and two covers" project may not be as expected. 2. The progress of the fund-raising project may be lower than expected. 3. The market expansion of brushless motor business may not meet expectations.
