From January to September 2013, the company achieved operating income of 212 million yuan, down 1.39% from the same period last year, operating profit of 39.62 million yuan, down 25.07% from the same period last year, and net profit belonging to the parent company of 33.24 million yuan, down 26.4% from the same period last year.

Of this total, the operating income in the third quarter was 68.18 million yuan, down 9.21% from the same period last year, and the operating profit was 9.18 million yuan, down 40.42% from the same period last year. The net profit attributed to the parent company was 7.16 million yuan, down 45.28% from the same period last year, and earnings per share was 0.03 yuan.

Operating income continued to decline in the third quarter. The company is located in Puning, Guangdong Province, mainly engaged in chicken essence, chicken powder and other product research and development, production and sales. Affected by the poor environment of the catering market, the sales of the company's products have been restrained. From January to September 2013, the company's operating revenue fell 1.39% from a year earlier. From a quarterly point of view, since the second quarter, the company's operating income has declined, and the company's operating income has dropped by 10.95% and 9.21% respectively in the second and third quarters compared with the same period last year.

The decline in gross profit margin and the increase in the rate of expenses during the period further affect the performance of the company. During the reporting period, due to the decline in the gross profit margin of the company's main products, chicken powder and chicken essence, the company's comprehensive gross profit margin decreased by 2.95 percentage points year-on-year to 40.54%. As the company gradually invested the funds raised in the listing into the fund-raising project and the Guangdong sauce production base construction project, the company's interest income decreased, and the company's financial expense rate increased by 2.82% year-on-year to-3.64%. As a result, the expense rate during the period of the company increased by 2.42 percentage points to 20.25%. The rise and fall of expense rate and gross profit margin during the period are the main reasons why the decline of the company's performance is higher than that of the company's operating income.

With the release of investment and production and the continuous expansion of the market network, the company's performance growth is expected to accelerate in the future. The company's fund-raising project "20, 000 tons of chicken essence and chicken powder production base project" was completed and put into production at the end of April 2013. the company's production capacity has increased to 32000 tons / year, and the company's marketing network construction project has also been completed. Under the background of the concentrated release of production capacity and the continuous improvement of the marketing network, the company's performance growth is expected to accelerate. The 10,000-ton sauce project that the company built in October 2012 is expected to reach production in October 2014, which is expected to become a new growth point for the company in the future.

Profit forecast and rating. The company expects results to fall by 0% in 2013, between 20% and 20%. We estimate that the company's EPS from 2013 to 2015 will be 0.16,0.18 and 0.22 yuan respectively. Based on yesterday's closing price, the corresponding dynamic PE will be 36X, 31x and 26x respectively, maintaining the company's "neutral" investment rating.

Risk hint. (1) food safety risk; (2) market expansion is lower than expected risk; (3) fund-raising and production can release lower than expected risk.