In 2011, the company achieved operating income of 285 million yuan, an increase of 5.27% over the same period last year; operating profit of 68.5999 million yuan, an increase of 1% over the same period last year; net profit belonging to the owner of the parent company was 58.3235 million yuan, an increase of 0.81% over the same period last year; and basic earnings per share was 0.31 yuan. The allocation plan is to increase 5 shares for every 10 shares, with a dividend of 2.5 yuan (including tax).
In the first quarter of 2012, the company achieved operating income of 62.9479 million yuan, an increase of 7.88% over the same period last year; operating profit of 15.1974 million yuan, an increase of 2.48% over the same period last year; net profit belonging to the owner of the parent company was 13.0292 million yuan, up 12.15% over the same period last year; and basic earnings per share was 0.07 yuan.
The transformation of the production line led to a decrease in the output of chicken essence products. The company is located in Puning, Guangdong Province, mainly engaged in chicken essence, chicken powder product research and development, production and sales, listed at the end of 2010.
Among them, the annual production capacity of chicken powder is about 9500 tons and the production capacity of chicken essence is about 2500 tons. Benefiting from the increase in product prices, coupled with increased market infrastructure, increased market development and investment, the company achieved operating income of 285 million yuan during the reporting period, an increase of 5.27% over the same period last year. Among them, the business income of chicken powder products was 188 million yuan, up 17.67% from the same period last year, and the gross profit margin was 38.14%, an increase of 0.53% over the same period last year; the business income of chicken powder products was 43 million yuan, down 13.3% from the same period last year, and the gross profit margin decreased 0.27% to 38.62%. The decline in the output of chicken essence products is caused by the upgrading of the production line, and the decline in gross profit margin is caused by the change of product structure and the change of labor wages.
During the reporting period, the company's ability to control expenses declined during the period. For the whole of 2012, the company's period expense rate was 13.74%, up 2.1 percentage points from the same period last year. Among them, the sales expense rate was 10.52%, up 5.08% from the same period last year; the management expense rate was 8.61%, up 1.84% from the same period last year; and the financial expense rate was-5.39%, down 4.82% from the same period last year.
Capacity expansion to meet the upgrading of consumption. With the continuous growth of the economy and the continuous upgrading of consumption, people's high requirements for the taste and nutrition of the diet are promoting the rapid development of the condiment industry. The sales volume of chicken essence and chicken powder in China is increasing year by year, with an annual growth rate of about 20%, and the industry is in an obvious upward channel. The company landed in the small and medium-sized board market in the second half of last year, and the funds raised will be used for the construction of 20,000 tons of chicken essence, chicken powder production base and other projects. The project is expected to reach production in the first half of 2012. After reaching production, the production capacity of the company's main products, chicken powder and chicken essence, will increase from the existing 12000 tons to 32000 tons, effectively improving the competitiveness of enterprises.
Profit forecast and investment rating. We expect the company's EPS from 2012 to 2013 to be 0.40 yuan and 0.50 yuan. According to the latest closing price, the corresponding dynamic price-to-earnings ratio is 24 times and 19 times. We maintain the company's "overweight" investment rating.
Risk hint. 1) the risk of intensified market competition; 2) the risk of food safety.