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First quarter results slightly below expectations due to impairment. First quarter of 2010 achieved revenues of 8,882 million, an increase of 890 - / 0; net profit of 12.24 million yuan, up 43%, earnings per share of 0.11 yuan, slightly lower than we expected. As the raw material price increases, but rises in product prices lagged, down 1 percentage point year on year gross margin to 30.6u-/ o. In addition, sales growth accelerated, the company adopted a more stringent policy provision for accounts receivable, in the first quarter put out 316 million in bad debt provision for impairment (impairment of the same period last year, back to red). If the deduction for bad debts, in the first quarter operating profit rose 72%.
The second quarter gross margin is expected to rebound significantly. The first quarter of the price of raw materials (ethylene glycol, adipic acid, etc.) rise, but the price hike has a lag: under strong demand in the downstream, the company has since raised the price since April, we estimate some of the chemical aluminum capacitors increase up to 30-400 - / 0. Therefore, we estimate the second quarter, revenue rose 30c / o the above, and the gross margin is expected since the first quarter of 30.60-/ 0 in the second half rally to 34-35c-/ o level.
New products to maintain good growth momentum. We believe that the main surprise in the new universe is solid state polymer capacitors and supercapacitors chemicals, these two new products with high barriers to entry, high-margin features. Solid capacitors is the fastest growing new capacitors, and super capacitor, driven by new energy vehicles have increased rapidly. As the leader in the company, the first light has been cut into the Japanese, the U.S. Department of capacitor manufacturers in the supply chain. Although the first quarter is the traditional off-season, new products, revenue has more than 10 million yuan, compared with only 7 million last year, the income of the first half, still maintain a rapid momentum of growth.
Risk factors. Soaring cost of raw materials, competition leads to prices and profit margins, lower than expected demand for new products.
Maintain Buy, target price of 58 yuan. As the bad debts is high, we slightly reduced the new universe of EPS forecast 2010-2012 state from adjusting to 0.88/1.40/1.75 0.94/1.44/1.76 per element, corresponding to the current PE is 52/33/26 times the current price. We believe that is the A shares in the company's unique electronic chemicals _ Ge benefit from replacement demand for new components and new energy vehicle's rapid growth, should enjoy the valuation advantage. Target price of 58 yuan to maintain (0.8 times the net cash per share plus PEG 7 yuan) and buy rating. |
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