PVC of the hottest conch profile led to a sharp in

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Conch profile: PVC led to a substantial increase in performance in the first half of the year as expected


on June 26, the company released a semi annual performance forecast with a safe distance in 2009. In the first half of the year, the company is expected to achieve a net profit of more than 100million yuan, an increase of about 100% year-on-year. The basic earnings per share of the company in the first half of the year was about 0.29 yuan, in line with our expectations

key points of investment:

in the first half of the year, PVC raw material price decline factors exceeded the impact of demand decline, which was the main driving force of performance growth. At the end of last year, we pointed out that the company's performance was significantly negatively correlated with the price of PVC raw materials, and the company's performance would directly benefit from the fall in PVC prices. From the first half of 2009, although the company's sales volume fell by about 10% due to the impact of the real estate market, the fall level of PVC prices during this period was more obvious, from the high of 8500 yuan/ton last year to the current 6600 yuan/ton. The factors of cost decline greatly exceeded the impact of demand slowdown and became the main driving force for the company's performance to grow significantly in the same direction

the proportion of colored profiles has increased significantly, and the scale effect has further promoted the gross profit margin of this segment product. In the first half of 2009, the company sold 20000 tons of color profiles with high gross profit margin, which doubled over the same period last year. With the expansion of production, the depreciation cost per unit product decreased significantly, and the scale effect appeared. At present, its gross profit margin has further increased by 3-4 percentage points from last year's 15% to the role of "government service". It is expected that the contribution of color profiles to the company's profits in 2009 will reach about 20%

layout Xinjiang lays a good layout for the further expansion of the company in the future. The Xinjiang company recently established by the company will complete the layout of the company in the northwest, so as to form a relatively perfect national layout with the production bases in East China, North China and South China. With the domestic real estate market recovering, this will help the company expand sales and consolidate its existing advantages in the plastic profile market

maintain the "strongly recommended" investment rating. Since the fourth quarter of 2008, the falling factors of PVC costs of professional service manufacturers of Jinan experimental machine factory have exceeded the impact of the slowdown in demand, driving the company's performance to show significant restorative growth. At the same time, the establishment of Xinjiang company will also expand the company's production capacity, and the company's production and sales are expected to achieve stable growth in the next two years. The company's annual EPS is expected to be 0.60, 0.73 and 0.87 yuan, maintaining a strongly recommended investment rating

risk tip: the domestic PVC price is likely to rise gradually in the second half of the year

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