The company announced its 2011 results, with an operating income of 1.79 billion yuan during the reporting period, an increase of 75.3 percent over the same period last year, an operating profit of 11.16 million yuan, a decrease of 76.5 percent over the same period last year, and a net profit of 1182 yuan belonging to shareholders of the parent company, down 67.6 percent from the same period last year. earnings per share are 0.08 yuan.
The increase in product output boosted the company's operating income. In 2011, the company's operating income increased by 75%, mainly because the subsidiary Runfeng aluminum foil 50,000 tons / year high-precision aluminum foil project was put into production, and the company's household aluminum foil sales increased significantly, resulting in a 68.4% year-on-year increase in household aluminum foil product revenue; on the other hand, the production capacity of the "50000 tons / year high precision aluminum strip" project in the IPO project was gradually released, resulting in a 47% increase in business revenue.
The gross profit margin has dropped significantly. The company's comprehensive gross profit margin fell by 3% in 2011. on the one hand, the progress of the company's new aluminum foil production line is slow, resulting in depreciation and amortization resulting in investment conversion to increase the production cost of the product, but the product capacity has not been released, thus dragging down the company's performance; on the other hand, the degree of competition in the aluminum foil industry has increased, making the company's aluminum foil processing fees reduced significantly.
Financial costs have risen sharply. The company's financial expenses increased by 212% year-on-year to 108 million yuan, mainly because the company is building the first phase of a high-precision aluminum strip project with an annual output of 450000 tons, which increases the balance of bank loans and leads to a rise in the company's interest expenses.
Aluminum foil industry leader, downstream demand is still at a low ebb. The company's main products include household aluminum foil and medicinal aluminum foil, in which household aluminum foil ranks second in the domestic market share, mainly sold to overseas developed countries; medicinal aluminum foil has the first domestic market share, as high as 70%. We believe that due to the recent weak fundamentals at home and abroad, the demand for aluminum foil at home and abroad has been affected to varying degrees; on the other hand, the promotion of the application of household and medicinal aluminum foil requires the improvement of consumers' environmental awareness and living standards, and the replacement of plastic cling film and disposable lunch boxes still takes a long time, so the demand for household and medicinal aluminum foil will grow relatively slowly in the future.
Production capacity has increased steadily and substantially, but it has made a limited contribution to near-term performance. The company's current aluminum foil production capacity of 140000 tons / year, the company's investment project in the 30,000 tons / year aluminum foil production line will be completed and put into production in the second half of the year, when the company's aluminum foil production capacity will reach 170000 tons / year; the company's aluminum strip production capacity is about 100000 tons / year. The capacity under construction includes the first phase of the high-precision aluminum strip project with an annual production capacity of 450000 tons (a non-public offering project, which is expected to be completed and put into production by the end of 2013). As the downstream demand of the aluminum foil industry is still at a low ebb, the utilization rate of the company's product capacity is expected to remain low in 2012, and the steady growth of the company's product capacity has limited contribution to the current performance, but it is conducive to the long-term interests of the company in the future.
Profit forecast. We expect the company to achieve operating income of 2.16 billion yuan in 2012, an increase of 20.7% over the same period last year, and the net profit attributed to investors of listed companies is 8.39 million yuan, down 29% from the same period last year. It is estimated that the EPS of the company in 12-14 years is 0.05,0.28,0.48 yuan per share respectively (without considering the impact of non-public offerings on equity), and the PE corresponding to the latest stock price is 223,43,25 times respectively. Although the company is a leader in the aluminum foil industry and capacity expansion is obvious, but taking into account the overall weak downstream demand, limited capacity release, the current valuation level is high, so the company was downgraded to "neutral".
Risk hint. The risk of large fluctuation of aluminum foil processing fee and the risk that the project progress is lower than expected.