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Dili shares released its quarterly report for 14 years on April 27th. 1Q14 achieved revenue of 220 million, an increase of 21% over the same period last year, and a net profit of 20 million belonging to shareholders of listed companies, down 46% from 0.04 yuan last year. The company estimates that the net profit of 1H14 attributable to shareholders of listed companies ranges from 0.4 to 60 million yuan, down 40% and 10% from the same period last year.

Peace viewpoint:

1. 1Q14 performance dropped significantly compared with the same period last year, but improved month-on-month:

Although 1Q14's revenue rose 21 per cent year-on-year, net profit plunged 46 per cent. On the one hand, the company's gross profit margin fell by 2 percentage points to 28% due to the rise in energy consumption costs dominated by natural gas, the constraints on product sales prices caused by the depressed consumption in the catering industry, and the lower-than-expected production capacity release of new projects. On the other hand, the increase in three costs brought about by the expansion of the scale also brings some pressure to the current operation.

Considering the impact of factors such as rising natural gas prices and depressed consumption in the catering industry on the company's operation has been gradually reflected since the second half of 2013, so the change of 1Q14's net profit on a month-on-month basis can better explain the changes in the company's operating situation. By comparison, it is found that compared with the net profit of 1104w and 229w of 3Q13 and 4Q13 respectively, the improvement of 1Q14 operation is more significant.

2. When a new chapter begins:

The company has suspended trading since March 12, 2014 due to major planning events, and is currently in the stage of suspension due to major asset restructuring. Referring to the annual report, the company listed "completing the acquisition of not less than one company" as one of the 14-year key projects, and we judge that 14 years will be the year when a new chapter will be opened. According to public disclosure, the company's shares will be postponed to resume trading no later than June 17, 2014.

3. Profit forecast and valuation:

Maintain the company's 14-year and 15-year EPS of 0.25,0.30 yuan respectively, corresponding to the closing price of 15.05yuan on April 27,2014, PE is 61.2,51.0 times respectively. Taking into account the company's main business signs of month-on-month improvement, and there are expectations to expand into new areas, maintain the "recommended" rating.

4. Risk hint: the schedule of the new project is not up to expectation, the price of raw materials fluctuates, etc.