In the third quarter of 2011, the company achieved operating income of 595 million yuan, an increase of 91.6% over the same period last year; operating profit of 144 million yuan, an increase of 116.67% over the same period last year; net profit of 84.8757 million yuan belonging to the owner of the parent company, an increase of 48.65% over the same period last year; and basic earnings per share of 0.42 yuan per share.
Business income maintained rapid growth. Although the photovoltaic industry has entered a period of adjustment, the biggest impact in the first three quarters is still silicon wafer and module manufacturers, and the company's revenue continues to grow. There are three main reasons: first, due to the rapid expansion of the photovoltaic industry, product prices have fallen rapidly, leading to accelerated upgrading of downstream equipment products to reduce costs, and the single crystal furnace project raised by the company this year has reached full production and is expected to achieve 700-800 single crystal furnaces for the whole year; second, the business cycle of photovoltaic equipment lags behind, so the base is relatively low in the same period last year; third, subsidiaries merge tables, and new products achieve revenue.
The business adjustment has led to a substantial increase in gross profit margin. The company reorganized its business, excluding less profitable businesses, and realized revenue from a number of new businesses with higher gross profit margins, so the company's comprehensive gross profit margin was 42.3%, up 8.3 percentage points from the same period last year, and operating profit increased significantly.
There is a large increase in fees during the period. During the reporting period, the company expanded its sales scale and increased its investment in research and development. sales expenses and management expenses increased by 161.81% and 195.56% respectively over the same period last year, with expenses of 77.58 million yuan during the period, an increase of 46.94 million yuan over the same period last year.
The subsidiary did an excellent job. During the reporting period, the company's holding subsidiary performed well, outperforming the parent company's business, with net profit increasing by 93.3% and minority shareholders' profit and loss accounting for 24.3%.
The new business is coming into force. During the reporting period, the company began to reap the fruits of the previous new project reserve, and realized income from a number of businesses. Polycrystal furnace, multi-wire cutting machine, silicon wafer demonstration line project, graphite thermal field and crucible accounted for more than 30% of the new business income.
The company's polycrystal furnace and multi-wire cutting machine sales will become the main force of the new growth. Shanghai Jeames, which is 68% owned by the company, and Tianlong Light Source, which owns 56.2%, have been merged. It is estimated that its graphite thermal field and crucible sales will bring the company a net profit of more than 40 million belonging to the parent company for the whole year, and the company's sapphire LED furnace will also achieve a small amount of revenue in the second half of the year. Due to increased competition in silicon wafers, the demonstration line project will have revenue and no profit this year, and sapphire cutting machines and MOVCD are still under development.
The industry may be adjusted in the future. Since the beginning of this year, the reduction of subsidies and the European debt crisis have made the downstream photovoltaic installation demand flat, while photovoltaic factories have expanded greatly, and the industry as a whole is in overcapacity, resulting in the photovoltaic industry entering the severe winter ahead of time, and the prices of polysilicon, wafers and components have been declining all the wafer. At present, some manufacturers have begun to limit production, which is bound to affect future investment in photovoltaic equipment, and its negative effects may appear next year.
Earnings forecast and rating: the company's EPS in 2011, 2012 and 2013 is expected to be 0.72,1.09,1.56 yuan respectively, with a corresponding dynamic price-to-earnings ratio of 23 times, 15 times and 11 times respectively based on the closing price on October 21. Although the industrialization process of the company's polycrystal furnace is slightly slower than expected, there is a wide space for the company's new products to import and maintain the company's investment rating of "increasing its holdings".
Risk tips: the European debt crisis continues to affect downstream demand; new products do not meet expectations; and the equipment industry is affected by the decline in photovoltaic investment.
