In the first quarter of 2013, the company achieved operating income of 219 million yuan, an increase of 15.29% over the same period last year; operating profit of 875100 yuan, an increase of 53.33% over the same period last year; net profit belonging to the owner of the parent company was 1.5525 million yuan, an increase of 139.99% over the same period last year; and basic earnings per share was 0.0045 yuan.
The company belongs to the building materials industry, the main business is the production and sales of float glass and glass products.
The price bottomed out and rebounded to increase the company's revenue. Glass prices began to bottom out in the first quarter on the basis of the previous continuous decline, and the price recovery is the main reason for the company's revenue growth in the first quarter.
Profitability improved over the same period last year, and performance picked up somewhat. At present, if the glass industry as a whole is recovering, on the basis of the rebound in product prices, the company's comprehensive gross profit margin during the reporting period slightly increased by 0.66 percentage points year-on-year to 15.08%; financial expenses increased by 48.79% year-on-year, resulting in an increase of 0.32 percentage points to 14.16% during the period. The operating profit is profitable compared with the previous month, indicating that the company's operating situation has improved.
Future performance growth still depends on project investment. Due to the decline in downstream demand, weak product prices, industry overcapacity and other circumstances, the company's performance in 2012 is weak.
We believe that the company's future concerns are as follows: 1) the company has invested nearly 800 million yuan in two phases to build an annual production line of 3.1 million weight boxes of advanced automotive skilled glass substrate materials, and an annual production line of 500000 weight boxes of special low-radiation and energy-saving glass. It is expected that the project will achieve an average annual net profit of 216 million yuan after reaching full production, which will help the company to expand the glass industry chain and improve the profitability of its products. Enhance the company's ability to resist the cycle. 2) the company bought 42% of Suzhou Shengkangda Biotechnology Co., Ltd., held by traditional Chinese Medicine, with 38 million yuan to carry out research and development of anti-tumor biomedicine. If it can be successfully realized, it is expected to improve the company's current situation of single product structure and enhance the company's profitability. In addition, the company invested 27 million yuan to participate in Xinjiang Puyao 500t/d low-radiation energy-saving coated glass production line, which may produce some investment income after the project is put into production.
Profit forecast and investment rating. The company's EPS from 2013 to 2014 is expected to be 0.10 yuan and 0.20 yuan respectively, with the corresponding dynamic price-to-earnings ratio of 75 times and 35 times respectively based on the recent closing price. In view of the lack of obvious signs of recovery in the industry, the company's income forecast for new projects is not clear, maintaining the company's "neutral" investment rating.
Risk hint. The recovery of the industry economy is less than the expected risk; the project investment return is less than the expected risk.