In the first three quarters of 2008, the company achieved operating income of 378 million yuan, up 28.4% from the same period last year; operating profit of 38.47 million yuan, down 24% from the same period last year; and net profit belonging to the owner of the parent company was 32.61 million yuan, down 27.3% from the same period last year. Realize basic earnings per share of 0.13 yuan.
Factors such as rising costs make the company's income increase without profit in the first three quarters, and the company's operating income in the third quarter continues to maintain the growth momentum of the previous two quarters, mainly due to the gradual release of production capacity of the company's Pulin No.2 plant. Product sales in the first three quarters increased by more than 30% compared with the same period last year. During the reporting period, the company's profitability decreased significantly, and the comprehensive gross profit margin decreased by 6.2 percentage points compared with the same period last year. The main reasons are as follows: first, the product cost has risen, and the increase in raw material prices and labor costs during the reporting period has led to a substantial increase in the company's cost, squeezing the profit margin of the company's products. Second, the price of products has dropped. Nearly 60% of the company's products are used for export, and the products are mainly exported to Europe. Due to the depreciation of the euro against the RMB in the third quarter, the RMB pricing of the company's export products has declined. In the coming period of time, commodity prices are expected to decline, corporate cost pressure will ease, while the euro has continued to depreciate against the RMB since October, and the downward pressure on corporate product prices remains strong. Comparatively speaking, the product price reduction has a greater impact on the company's performance, and the company's profitability is difficult to recover in the short term.
During the period, the expense rate rose slightly, and during the reporting period, the expense rate rose 1.2 percent year-on-year, of which the sales expense rate and management expense rate increased slightly, mainly due to the increase in market development and staff training costs in order to prepare for the HDI project to be put into production, and the financial expense rate rose 0.6 percent year-on-year, mainly due to the increase in exchange losses caused by the devaluation of the euro against the RMB.
The HDI project is the key to the company's future performance growth. The HDI project raised by the company's IPO is expected to start production in the first half of 2009. HDI board is mainly used in mobile phones, automotive electronics and other fields. At present, the domestic mobile phone manufacturing industry has a trend to transfer from the Pearl River Delta and Yangtze River Delta to the Bohai Rim region. In the past two years, Foxconn, BYD, Compal and other mobile phone contract manufacturers have successively invested and set up factories in the region, while Yunji Inc has also established two major brand mobile phone manufacturers in the region, Nokia and Motorola. The future growth of the mobile phone manufacturing industry in the Bohai Rim region is worth looking forward to. Tianjin Pulin, as one of the few enterprises capable of producing HDI boards in the Bohai Rim, will benefit from the growth of the mobile phone manufacturing industry in the region.
We estimate that the company's earnings per share from 2008 to 2010 are 0.17,0.24 and 0.32 yuan respectively, and the corresponding dynamic PE are 24 times, 16 times and 12 times respectively. Compared with the listed companies in the same industry, the valuation advantage is not obvious. Considering the uncertainty of the production time and income of the HDI project, the company maintains its "neutral" investment rating.
