Main points of the annual report:
The company released its 2011 annual report: operating income was 1.939 billion yuan, down-16.74% from the same period last year, and its net profit was 35 million yuan, down 86.14% from the same period last year. The main reason for the sharp decline in operating income and net profit is the rapid reduction of subsidies for photovoltaic power generation in Germany and Italy, the difficulty of financing photovoltaic power stations caused by the European debt crisis, sluggish demand and a large amount of overcapacity in China, and the photovoltaic industry fell to a freezing point in the second half of 2011.
The net operating cash flow of the company was 116 million yuan, down 51.18% from the same period last year. On the one hand, the company's net profit decreased a lot, on the other hand, bills and accounts receivable totaled 421 million yuan, an increase of 28.35% over the same period last year, and inventory increased by 97.26% over the same period last year.
The company's gross profit margin was 15.06%, down 6.18% from the same period last year, and the rate of expenses for three items was 18.80%, with an absolute increase of 7.59% over the same period last year. The main reason is the market recession, the company increased marketing efforts, leading to an increase in sales costs; R & D pointed out that the increase in amortization of R & D expenditure and the expansion of scale led to an increase in managers' salary expenses, resulting in an increase in management expenses.
Analysis and comments: due to the sharp decline in the prosperity of the photovoltaic industry in the second half of the year, the company's gross profit margin dropped sharply, at the same time, the expense rate increased, and the provision for inventory impairment totaled 51 million yuan, resulting in a substantial decline in net profit. Demand in major European markets is slowing, domestic capacity expansion is too aggressive, and the price of photovoltaic products has fallen sharply in the short term, squeezing the company's gross profit margin and causing inventory impairment. In order to cope with the depressed market, the company has increased its investment in marketing and research and development, resulting in an increase in the rate of expenses.
When the market was extremely depressed in the second half of last year, the company maintained a relatively healthy cash flow. In the case of a substantial decline in net profit, the company strives to maintain a positive operating cash flow, reflecting the characteristics of sound operation, and laying a good foundation for this year's operation.
There will be many challenges this year, but the market will not be any worse than last year. Although the subsidies in Germany and Italy have been greatly reduced, Germany has given a three-month buffer period for applied projects, so that the rush to install market continues in the second and third quarters, and the new increment in Germany is expected to reach 8GW this year. New installed 30GW around the world. And prices will not fall sharply in a short period of time to alleviate the risk of inventory impairment.
The company's technology research and development, new sales channel development work is good. The company established an overseas branch last year, and the German 20MW photovoltaic project was successfully connected to the grid. This year, the 150MW photovoltaic project has been achieved in Yunnan, and the penetration of downstream channels has achieved initial results, which has improved the profitability of the company.
It is estimated that the EPS in 2012, 13 and 14 is 0.30,0.39,0.54 yuan respectively, and the corresponding PE is 34,27,19 times respectively, maintaining the company's "overweight" rating.