In 2011, the company achieved operating income of 2.17 billion yuan, up 16.60% from the same period last year; operating profit of 25.23 million yuan, down 84.11% from the same period last year; net profit belonging to the owner of the parent company was 35.71 million yuan, down 73.90% from the same period last year; and diluted earnings per share was 0.09 yuan.
Profit distribution plan: 0.3 yuan in cash for every 10 shares.
The sharp drop in gross profit margin led to a decline in net profit. The company is mainly engaged in the production and sales of TV appearance structural parts, in addition, the products also include white electricity appearance structural parts and automobile modular structural parts. Among them, the TV business accounts for 67.28% of the revenue, which is the main source of the company's income. In 2011, affected by the decline in demand in the downstream black electricity industry, the revenue growth of TV appearance components, the company's main product, slowed down, with an increase of only 3.56% over the same period last year. However, white power business revenue increased by 66.70% compared with the same period last year, driving the company's overall revenue growth. During the reporting period, affected by rising raw material and labor costs, unreasonable product structure and slowing downstream demand growth, the company's comprehensive gross profit margin fell 4.95 percentage points year-on-year to 12.77%. Among them, the gross profit margin of black electricity and white electricity business decreased by 5.99 percentage points and 4.45 percentage points respectively compared with the same period last year, resulting in a sharp decline in the company's net profit.
The ability of cost control decreased during the period. In 2011, the company's expense rate during the period was 11.16%, an increase of 2.14% over the same period last year. Among them, the management expense rate was 7.47%, up 1.60% from the same period last year, which was the main reason for the increase in the expense rate during the company period.
Focus on the expansion of the company's business into other areas. The growth rate of the black electricity industry has slowed in recent years. In order to cope with the slowing down of the growth rate of downstream black electricity customers, the company has increased the market expansion of white electricity and auto parts. In 2011, the company's white electricity business revenue increased by 66.70% compared with the same period last year, accounting for 28.67% of the operating income. In the company's investment project, the construction project of Wuhu automobile internal and external accessories and home appliance structural parts will be put into production in January 2013. after it is put into production, it will effectively expand the production capacity of the company's automotive and white electricity components and help the company transform to product diversification.
Earnings forecast: we expect the company's earnings per share from 2012 to 2013 to be 0.19 yuan and 0.27 yuan respectively, according to the closing price on April 9, the corresponding dynamic price-to-earnings ratio is 40 times and 27 times respectively, maintaining the company's "neutral" investment rating.
Risk tips: downstream demand decline leads to a decline in orders; market competition risk; key customer loss risk.
