In the first three quarters of 2009, the company realized operating income of 274 million yuan, down 11.17% from the same period last year; operating profit of 23.7526 million yuan (- 41.4455 million yuan for the same period last year); net profit of 24.8372 million yuan belonging to the owner of the parent company (- 3245.30 yuan for the same period last year); and basic earnings per share of 0.091 yuan.
Among them, the operating income in the third quarter was 7485.72 yuan, down-18.60% from the same period last year; the net profit belonging to the owner of the parent company was 6.4598 million yuan (- 11.2529 million yuan in the same period last year), and the basic earnings per share was 0.024 yuan.
To reverse losses and restore profits. The company's veterinary drug business is still losing money. Sales of the real estate business decreased. However, the pesticide business is relatively stable, and due to the strong sales and rising prices of avermectin at the beginning of the year, the income of pesticides has increased. Due to the company's heavy losses in 2008 and a turnround in 2009, the composite gross profit margin increased by 8.42 percentage points compared with the same period last year. At the same time, the expense rate during the period of the company fell by 1.11 percentage points compared with the same period last year. Among them, the sales expense rate decreased by 0.22% year-on-year, the financial expense rate decreased by 1.06% year-on-year, but the management expense rate increased by 0.17% year-on-year, and profitability recovered.
The results fell in the second half of the year. However, due to the decline in performance in the third quarter after September, due to the passing of the peak season for pesticide sales, income and net profit decreased by 28.99% and 22.13% respectively compared with the previous month. The comprehensive gross profit margin decreased slightly by 1.37 percentage points from the previous month. It is expected that the company's product sales will still decline in the fourth quarter.
Profits mainly come from reducing holdings of stocks. At present, the company's main business is still hovering on the loss line. However, the non-recurrent profit and loss was nearly 25.5 million yuan, of which HTC maintained its profit due to the dividend of HTC warp-knitted shares and the profit of 23.0324 million yuan from the sale of shares.
Delisting of highly toxic pesticides brings room for growth. Since 2007, China has completely banned the use of five highly toxic pesticides such as methamidophos in agricultural production, and the proportion of highly toxic pesticides will be reduced from the current 20% to about 5%. The company's environment-friendly pesticide avermectin, as the largest bio-pesticide product in China, has a lot of room for development. The company will benefit from the delisting of highly toxic pesticides.
Profit forecast and rating. It is estimated that the company's earnings per share from 2009 to 2011 are 0.10,0.12 and 0.13 yuan, respectively. Based on the closing price on October 26, the corresponding dynamic P / E ratios are 78 times, 64 times and 60 times, respectively. Maintain a "neutral" investment rating.
