Events:

According to the company's 12-year annual report, the company achieved operating income of 3.772 billion yuan in 12 years, down 2.51% from the same period last year; net profit was 120 million yuan, down 76.12% from the same period last year; net profit after deducting non-recurring profit and loss was 77.36 million yuan, an increase of 135.7% over the same period last year; earnings per share were 0.13 yuan. The company plans to pay a cash dividend of 0.5 yuan for every 10 shares.

Comments:

The scale of income is stable, and the reduction of investment income leads to a decline in net profit of 3.772 billion yuan in the past 12 years, down 2.51% from the same period last year, and the scale of income is basically stable compared with 11 years. However, due to the company's 11-year transfer of its 16% stake in Jinhui Company and the recognition of investment income of 458 million yuan, the 12-year investment income decreased significantly compared with the same period last year, resulting in a 76.12% drop in net profit compared with the same period last year, but net profit increased by 135.7% after deducting non-recurring profits and losses.

Real estate project contribution income Foshan excellent Real Estate Development Co., Ltd., a 12-year wholly-owned subsidiary, confirmed sales income of 339,000 square meters of housing, making the company's real estate income 361 million yuan, with a gross profit margin of 48.91%, which has become one of the main contributions to the 12-year performance. The company's real estate business is positioned to develop the land after the relocation of the plant, and obtain funds to support the development of the company's main business.

There are competitive advantages in many fields, but the industry is at a cyclical trough. with new energy, new materials, energy saving and environmental protection industries as the core, the company has gradually formed an industrial pattern based on four series of products: dialysis materials, electrical materials, optical materials and barrier materials. Li-ion battery diaphragms, polarizing membranes and electrical capacitor films all have first-class competitive strength in China. However, as these industries are in a period of increasing competition, it has a certain impact on the profitability of the company. Recently, the company has developed PVDF films and composite intelligent energy-saving films for crystalline silicon solar cells, in order to form a new profit growth point through product upgrading.

To maintain the "prudent recommendation" investment rating, we expect the company's EPS for 13-14 years to be 0.15 yuan and 0.17 yuan respectively, maintaining the company's "prudent recommendation" investment rating.

The risk suggests that the further intensification of competition for the company's main products leads to a decline in gross profit margin.