Basic performance of the company: in the first quarter of 2012, the company achieved operating income of 536 million yuan, down 4.07% from the same period last year; operating profit loss of 2.7248 million yuan, down 348.77% from the same period last year; net profit belonging to the parent company was 975100 yuan, down 0.87% from the same period last year; basic earnings per share was 0.007 yuan.
The sharp increase in financial expenses lowers the company's performance: the decline in the company's performance is mainly due to the sharp increase in financial expenses compared with the same period last year (up 197.86% to 5.52 million yuan) and the sharp decline in non-operating income (down 350.51% to 5.71 million yuan). Attributed to the current payment of 2.65 million yuan in interest on loans to the company's controlling shareholder, Shanghai Hongchangsheng Group Co., Ltd., and an increase in working capital borrowing. Correspondingly increase interest expenses and non-payable transfer income of 5.07 million yuan in the current period.
Asset impairment losses decreased, monetary funds and prepayments increased significantly: asset impairment losses decreased by 196.61% to-193300 yuan compared with the same period last year, and monetary funds increased by 331.27% to 24.46 million yuan compared with the same period last year. Accounts receivable decreased and loans increased, and prepayments increased by 12213.51% to 41.34 million yuan over the same period last year, mainly due to unsettled trade purchase payments.
The wind power project has great potential, and the second phase project is worth looking forward to: the wind power business mainly comes from the revenue brought to the company by the Inner Mongolia wind power phase I project. The company's wind farm is located in Huitengxile, Inner Mongolia, which is rich in wind energy resources in winter and relatively less abundant in summer, so the seasonal impact of the company's wind power business income is more obvious. Wind power phase II is expected to bring further revenue growth to the company in the future.
Performance growth mainly depends on the performance of wind power projects: the company's future performance mainly depends on the operation of wind power projects. At present, China's wind power industry still maintains a trend of rapid growth. If the company's Inner Mongolia Wind Power Phase II project is successfully completed for power generation, it will produce economies of scale and reduce production costs. The profit space of wind power will be significantly improved under the condition that the on-grid electricity price remains unchanged. However, in the short term, the generating capacity of the wind farm may be lower than its generating capacity, which can not effectively play the expected revenue expectations of the power plant.
Earnings forecast and investment rating: the company is expected to achieve earnings per share of 0.05,0.08 and 0.12 yuan respectively from 2012 to 2014, with a corresponding dynamic price-to-earnings ratio of 166,110 and 70 times respectively. At present, the company's valuation is significantly higher than the sector's expectations, so it still maintains the company's "neutral" investment rating.
Risk tips: the recession in the trading industry and the uncertainty of future revenue from wind power projects.