Events:
Yichang (002420) announced its 2011 semi-annual report. During the reporting period, the company achieved operating income of 936 million yuan, an increase of 22% over the same period last year; operating profit of 35 million yuan, down 44% from the same period last year; and net profit of shareholders belonging to listed companies was 30 million yuan, down 43% from the same period last year. EPS 0.0744 yuan; lower than expected.
Comments:
Great changes have taken place in the main business structure. During the reporting period, the company's main business has not changed significantly, but the business structure has changed greatly. As the company has stepped up its efforts to expand its customers, the sales revenue of Baidian products has increased significantly compared with the same period last year, an increase of 159.56%, and the proportion of its sales revenue in the main business income has increased to 34.57% from 19.37% in the same period last year. The proportion of sales revenue of black electricity structure products in the main business income decreased to 62.37% from 76.88% in the same period last year.
Operating profit decreased by 44.38% compared with the same period last year in the first half of 2011. Although the prosperity of the white power industry has increased, due to factors such as rising prices of upstream raw materials, higher labor costs and the adjustment of the company's product structure, the cost of sales of white power products increased by 168.02%, reducing the gross profit margin to 16.71% from 19.34% last year, a decrease of 2.63%. Due to the weak growth of the color TV market, coupled with the weakening of the incentive policy effect of home appliances and the influence of purchase restrictions in first-tier cities, the sales revenue of the black electricity structure, as the company's main product, fell by 1.79% compared with the same period last year. The proportion of the main business income dropped to 62.37%, making the company's main business income growth lower than expected.
Management expenses increased by 84.68% compared with the same period last year. With the adjustment of the company's product structure and the extension of the industrial chain, the company increased its R & D investment, and R & D expenses increased by a large margin compared with the same period last year.
The risk suggests that the price of modified plastics and sheet metal structural parts, the main raw materials of the company's products, still fluctuates sharply; in the downstream TV industry of the company, domestic enterprises are not yet able to control the upper reaches of the liquid crystal industry chain, resulting in foreign brands squeezing the market share and profit space of domestic brands through price reduction and promotion. As the company's main customers are domestic enterprises, if competition in this industry intensifies, it will threaten the gross profit space of the company's products.
Profit forecast
Expected 2011, 2012, 2013 earnings per share of 0.42,0.51,0.62 yuan, taking into account the company's future performance growth expectations and industry conditions, we think that according to 2011 21 times PE is more reasonable, give the company a "neutral" rating.