In the first quarter of 2011, the company achieved operating income of 127 million yuan, an increase of 63.5% over the same period last year; operating profit of 11.23 million yuan, an increase of 42.9% over the same period last year; and the net profit of owners belonging to the parent company was 10.45 million yuan, an increase of 25.9% over the same period last year.
Both revenue and gross profit margin increased year-on-year. China's car sales in the first quarter were 4.98 million, an increase of 8 per cent over the same period last year. Benefiting from the increase in car sales in China, the company's orders and sales increased, and the operating income in the first quarter increased by 63.5% compared with the same period last year. We continue to maintain the company's judgment that revenue grew by about 30% in 2011 compared with the same period last year. The gross profit margin in the first quarter was 25.3%, an increase of 1.8% over the same period last year, mainly because the company's business focused on the field of precision die castings such as engines and gearboxes with the highest technical content, and the growth in sales achieved economies of scale. and Dongfeng Honda Motor Company's own brand engine and other parts began to mass production, improving the company's profitability.
During the period, the expense rate increased by 3 percentage points compared with the same period last year. In the first quarter, the company's expense rate was 16.4%, an increase of 3 percentage points over the same period last year. Among them, the rate of sales expenses increased by 3.7 percentage points to 7.2% compared with the same period last year. This is mainly because some batches of products exported to Ford in March were refused entry by the customs of the United States and Canada on the ground that worms were found on the solid wood pallets used. In order to ensure the supply to Ford, the company shipped the goods to Ford by air, so the air freight cost was 4.69 million yuan in advance. In addition, the increase in sales led to a corresponding increase in packaging costs. The rate of administrative expenses fell 0.6 percentage points year-on-year to 6.9%, while the rate of financial expenses was 2.3%, the same as in the same period last year.
The fund-raising project has been partially put into production and is expected to reach full production in 2012. The company's automotive precision die-casting parts expansion project equipment procurement and plant construction are stepping up, the first quarter has achieved benefits of 10.69 million yuan. It is expected to be completed by the end of 2011 and fully reach production in 2012, with an annual after-tax profit of 45.17 million yuan, equivalent to EPS0.5 yuan.
Profit forecast and rating. It is estimated that the 2011-2013EPS will be 0.62,0.89,1.15 yuan respectively, and the corresponding dynamic PE will be 29 times, 21 times and 16 times respectively based on the closing price of 20.45 yuan on March 23rd. Considering the company's full orders and fund-raising projects in the next two years, the company will be given an investment rating of "increasing holdings".
Risk hint. (1) the risk that the price of raw materials such as aluminum ingots rises higher than expected; (2) the risk of raising funds is lower than expected.
