Han Zhong Precision Machinery: Air compressor and vacuum pump market gradually open

Annual report: In the first half of 2011, the company achieved operating income, operating profit, net profit attributable to the parent company of 445.25, 94.22, 74.82 million yuan, an increase of 56.28%, 56.8%, and 41.27%, respectively. Earn 0.34 yuan per share.

Sales of refrigeration compressors are booming, accounting for a higher proportion. In the first half of 2011, the refrigeration compressor unit realized a revenue of 240 million yuan, an increase of 47.5% year-on-year; the gross profit margin was 35.58%, a year-on-year drop of 5 percentage points. The decrease in gross profit margin was mainly due to the increase in the proportion of small and medium refrigerating compressors. At present, this type of product has accounted for about 20% of the cooling compression revenue. During the 12th Five-Year Plan period, the development of cold chain logistics will continue to drive strong demand for refrigeration compressors.

The scale effect of air compressors appeared and the gross profit rate increased. In the first half of 2011, air compressors realized revenue of 170 million yuan, an increase of 65.9% year-on-year; gross margin was 28.8%, an increase of 7.7 percentage points year-on-year. The air compressor market gradually opened up, and the scale effect led to the improvement of gross profit margin.

Vacuum pump business has room for growth. In the first half of 2011, dry vacuum pumps achieved 10.27 million yuan in revenue, a year-on-year increase of 225% and a gross margin of 14.9%. The business is currently in its infancy, and the company can provide better after-sales service with its maintenance experience. The products will gradually replace imports, and the gross profit margin will also have more room for improvement.

Earnings Forecast and Investment Proposal: According to the 15% income tax calculation, the company's net profit for January-September 2011 is expected to increase by 15%-30% over the same period of last year, ie between 1.08-1.27 billion yuan. The growth rate of the second half of the year was slightly slower than the first half. Slightly reduce the company's earnings forecast, the company's 2011-2013 EPS is expected to be 0.81, 1.09, 1.48 yuan, the target price of 28.3 yuan, corresponding to 35 times PE in 11 years, holdings!