The company is mainly engaged in the production and sales of carbon black and electric power, and is one of the leaders in the carbon black industry, with an annual output of 300000 tons of carbon black, with an operating rate of nearly 100%. The output is in the forefront of the country, and the production capacity will still increase significantly this year and next year.
In 2011, the company achieved operating income of 445 million yuan, up 33.05% from the same period last year; operating profit of 42.6206 million yuan, down 16.6% from the same period last year; net profit belonging to the owner of the parent company was 36.1199 million yuan, down 18.27% from the same period last year; and basic earnings per share was 0.36 yuan per share. In addition, 5 shares are transferred for every 10 shares and a dividend of 2 yuan is paid out for every 10 shares.
The composite gross profit margin rebounded slightly. In 2011, the company's comprehensive gross profit margin was 19.14%, up 0.08 percentage points from the same period last year. The price of coal tar fell sharply in the fourth quarter, falling much faster than the price of carbon black, so the gross profit margin of carbon black business rebounded, while the company's unit price of tail gas power generation sales also contributed to the rebound of gross profit margin.
We believe that there is still room for the price of carbon black to rise in the future, and once the price of coal tar does not rise as much as that of carbon black, the gross profit margin may still rise.
Additional investment in Jiaozuo project. Jiaozuo project is 140000 tons of carbon black per year, including 105000 tons of hard carbon black and 35000 tons of soft carbon black, plus carbon black tail gas power generation device 14MW. At present, it is estimated that the first phase of 70,000 tons of carbon black will be put into production in the second quarter of 2012. We believe that the Jiaozuo project will contribute profits this year and is one of the main sources of revenue growth in 2012.
The industry is getting better, and the leader will benefit. Affected by the rise in oil prices and the low price of domestic coal tar, the competitiveness of domestic carbon black is becoming more and more obvious. We believe that once this trend continues, it will promote the great development of China's carbon black industry, including the improvement of industry concentration and the improvement of China's position in the global carbon black supply chain. The first to benefit is the leading enterprise, the company is the leader in the carbon black industry, with an annual production capacity of 300000 tons in 2011 and 370000 tons in 2012, which will become the second largest carbon black enterprise in China after black cats, and the product differentiation of the carbon black industry is relatively small. scale advantage is one of the most important factors in competition. Taking the opportunity of listing, the company's production capacity has increased significantly, and this time it will fully benefit from the arrival of industry opportunities.
Upgrade to "buy" rating. According to the production capacity of the company in the next two years, we estimate that the EPS of the company in 2012-14 is 0.53,0.66 and 0.65 yuan respectively, corresponding to the dynamic price-earnings ratio of the stock price on March 5th. Considering the company's compound growth rate of 20% for three consecutive years, we give the company a "buy" investment rating.
Risk hint: the price of coal tar rose higher than expected; the company's production and sales rate declined; the export trend slowed down.
