I. Overview of events
Tianlong Optoelectronics announced its quarterly report for 2011: from January to September 2011, the company achieved operating income of 595 million yuan, an increase of 91.60% over the same period last year, and operating profit of 144 million yuan, an increase of 93.33% over the same period last year. The net profit belonging to the shareholders of listed companies was 85 million yuan, an increase of 48.65% over the same period last year, slightly lower than we expected.
II. Analysis and judgment
Sales expenses and administrative expenses have increased significantly.
During the reporting period, sales expenses increased by 167.81% over the same period last year, mainly due to the launch of new products and the expansion of sales scale; management expenses increased by 195.96% over the same period last year, mainly due to increased investment in research and development and increased fixed costs for the expansion of production scale.
Acquisition and thickening performance is remarkable.
After the acquisition of Jeames, the company further improved its heat field design capacity, and Jeames contributed 12.77 million of its profits in the third quarter. With the acquisition of Tianlong light source crucible, the company basically completed the layout of the core components of the crystal growth furnace, and the light source crucible contributed 2.6 million of the profit in the third quarter. The company has 150 million super-raised funds, and further acquisitions to deepen the integration of photovoltaic equipment will not be ruled out in the future.
Expected volume of new products in the future
The company's new products sapphire growth furnace, multi-wire cutting machine is now in the market promotion stage, not the volume, need further attention, look forward to the new product volume in the future.
MOCVD R & D boosts valuation space
The company expects to complete the development of MOCVD equipment prototype in early 2012, which will open the road of domestic MOCVD equipment localization. MOCVD R & D will increase valuation space
Third, profit forecast and investment suggestions
Considering that there is no substantial progress in sapphire furnace sales this year, we slightly downgrade the company's profit forecast. It is estimated that the company's EPS for 2011-2013 will be 0.75,1.19 and 1.80 yuan, with a corresponding price-to-earnings ratio of 22 times, 14 times and 9 times respectively, maintaining the "cautious recommendation" investment rating with a target price of 24 yuan.
Fourth, risk tips:
The market demand of single crystal furnace is lower than expected, and the progress of MOCVD research and development is slow.
