Jiangsu Sunshine: The main industry net profit rate reversed polysilicon luster

The performance of the mid-year report has been growing well. During the reporting period, the company realized operating income of 1,192,649,400 yuan, an increase of 40.35% over the previous year; operating profit of 62,931,100 yuan, an increase of 17.05% over the same period of last year. Earnings per share of 0.024 yuan.

Net profit rate has curbed the downward trend in recent years, reflecting the company’s ability to control costs. Although the company's gross profit margin has declined due to rising wool prices and labor costs, during the reporting period, the company's net interest rate increased from 1.95% at the end of 10 to 3.13%, which has curbed the decline in the past three years. In the future, the company will continue to increase investment in new product research and development, promote brand strategy, and strengthen internal management to further enhance the company's overall competitiveness.

The company's polysilicon industry is developing rapidly and has a strong growth, bringing huge profits to the company.

During the reporting period, the polysilicon industry's operating income reached 311.68 million yuan, an increase of 246.23% over the same period of last year. The operating profit margin was 33.58%. Due to the sharp rise in the polysilicon market price in the first quarter of this year, the company's holding subsidiary Ningxia Sunshine Silicon Industry Co., Ltd. has achieved The profit is about 40 million yuan. The company's polysilicon industry has become a strong profit growth point in the company's main business.

The company continued to increase its technological innovation system and project research and development. As early as in 2008, the company had already obtained high-tech enterprises. In 2009, it was named a national-level innovative enterprise. In recent years, various R&D work has continuously achieved positive results. At the same time, the company is still expanding the thermal power plant. In the future, the company's thermal power business will be further expanded, which will reduce the company's operating costs.

Revenue Forecasting and Valuation According to our performance forecast model, we estimate the EPS for 2011-2013 to be 0.0365 yuan, 0.0484 yuan and 0.0628 yuan, respectively, and the corresponding price-earnings ratio for 2011-2013 will be 123.30 times, 92.89 times, and 71.65 respectively. Times. According to the company's historical PE/PB valuation range analysis, we give the company an “overweight” investment rating. At present, the company's PB is at the lower limit of historical valuation, and is based on historically safer 4x PB valuation. The target price for the next 6 months is 6.56 yuan.

Risks indicate that the rising costs of various types, including raw material prices and labor costs, have brought certain difficulties and uncertainties to the company's operations. The polysilicon industry, which is an important source of profit for the company, still faces the risk of significant price fluctuations. With polysilicon cost changes insignificant, the polysilicon market price has a decisive influence on earnings. In the first quarter of this year, the polysilicon market price rebounded sharply. It was later restrained by the industry structure of “two out of the box” and European countries lowered polysilicon subsidies, and fell to a certain degree. In July, the prices suddenly rebounded again. We believe that as China and the United States start solar energy feed-in tariff subsidies, demand for polysilicon will expand steadily and prices will remain stable. The company's polysilicon in Ningxia will bring stable profitability to the company with low-cost energy advantages.