From January to June 2010, the company achieved operating income of 3.593 billion yuan, an increase of 65.21% over the same period last year, operating profit of 154 million yuan, an increase of 933.01% over the same period last year, and net profit of 83.78 million yuan belonging to the owner of the parent company, an increase of 1665.63% over the same period last year.
One of the leaders in the domestic air conditioning compressor industry. The company's main business is R & D, production and sales of air-conditioning compressors and refrigerator compressors. 90.83% of the company's main business income comes from the production of compressors. According to the statistics of the China Home Appliances Association, the sales of its air conditioning compressors account for 18.33% of the national market share.
The market demand is strong and the production capacity is brought into full play. In the first half of 2010, the company produced 8.36 million air-conditioning compressors, an increase of 54.77% over the same period last year; and sold 8.5 million air-conditioning compressors, an increase of 50.28% over the same period last year, of which 1.69 million were exported, up 25.64% over the same period last year, and the export volume was 721 million yuan, an increase of 38.91% over the same period last year. Export share accounted for 20.56% of the total business income. In the first half of the year, the production and sales of air-conditioning compressors reached the best level in history, with an increase higher than that of the industry. The main reason for the growth is 1) benefiting from the expansion and extension of domestic policies to stimulate domestic demand, such as "new energy efficiency standards for air conditioners", "energy conservation to benefit the people" and "trade in the old for new". 2) the sharp increase in demand in emerging economies such as India and Brazil.
New energy efficiency standards have been implemented and comprehensive gross profit margins have been raised. From January to June 2010, the company's comprehensive gross profit margin was 14.09%, up 4.9 percentage points from the same period last year. The country has implemented the new energy efficiency standard since June 2010. compared with the old standard, the limit value of energy efficiency has increased by about 23%. During the reporting period, the company increased the production and research of frequency conversion products and new energy efficiency products, and the sales volume of high value-added new refrigerants and frequency conversion compressors increased greatly. in addition, the company timely adjusted the price of its products, so there was a huge increase in profits in the first half of the year.
Major shareholders issued more cash and raised funds to transform and expand production capacity. The company disclosed the plan of non-public offering of A-shares on August 25, 2010. the company plans to issue 65 million A-shares to Shanghai Electric (Group) Corporation, the largest shareholder, at a price of 7.79 yuan per share, raising 506 million yuan. The two sides signed a subscription agreement on August 23, which was subscribed by major shareholders in cash. The funds raised are mainly used to invest in the small non-fluorine frequency conversion compressor transformation and expansion project, L series ultra-high efficiency compressor capacity expansion project and supplementary operating funds. The transformation and expansion project of small fluorine-free frequency conversion compressors will become a new profit growth point of the company. After the technical transformation of the project is completed in 2013, the output of 2 million small energy-saving and fluorine-free frequency conversion compressors will be increased every year, with an additional profit of 50.86 million yuan and a (static) return of 21.4%.
Another expansion project has a total investment of 480 million yuan, with an additional sales revenue of 750 million yuan and an annual profit of 54.88 million yuan.
The company predicts that if there are no major changes in the macroeconomic and market environment, the company's net profit in the first three quarters of 2010 will increase significantly compared with the same period last year.
We estimate that the EPS of the company from 2010 to 2012 is 0.26,0.29,0.40 yuan respectively, corresponding to the dynamic price-earnings ratio of 37 times, 32 times and 24 times respectively corresponding to the closing price of 9.49 yuan on August 13th. Considering the growth of the company's future business, the company is given the investment rating of "increasing holdings" for the first time.
