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Key points of the report:
Event description Camel Shares Camel Xiangyang, a wholly-owned subsidiary, received 112012064 million yuan of compensation for land acquisition and storage and related income from Xiangyang Land Reserve and Supply Center. This amount is included in the "special payables", and the specific accounting treatment is subject to the annual audit confirmation results, which will have a positive impact on the company's 2012 annual performance.
Event comment:
In May 2011, Hubei Camel Investment Co., Ltd. obtained the development right of the original production site of Camel Group Xiangyang Battery Co., Ltd. (hereinafter referred to as "Camel Xiangyang") (the land has been collected and stored by Xiangyang Land Reserve and Supply Center in May 2011) through bidding and listing. At the same time, Camel Xiangyang contributed 57.9 million yuan to participate in the development of the land plot (34.5% of the contribution). The plot will be developed into a camel residential area by investment in the hump, and will be sold to internal employees of the company first.
Compensation for land acquisition and storage and related income increased the company's income in 2012. Recently, Camel Xiangyang received 55 million yuan of compensation for land acquisition and storage. The land appreciation income was divided into 57.012064 million yuan, totaling 112.12064 million yuan, which will significantly increase the company's 2012 performance.
The peak season of production and sales of automobile starting batteries is coming, and the performance in the third quarter is expected to improve significantly year-on-year. From our early grassroots research, with the temperature gradually decreasing, starter lead-acid batteries entered the traditional production and marketing peak season, and the company's product sales were good, and some regions even had supply gaps; With the gradual cancellation of the company's promotion policy, the gross profit rate will rise in the second half of the year. It is expected that the company's operating income and profit in the third quarter will increase by more than 50% year on year.
The production process is far ahead, and the release of production capacity supports the growth of annual performance. The company adopts the production process of stretch expansion and continuous rolling and continuous casting, and is in the leading position in the industry in terms of technology accumulation and production experience. Its cost advantage over peers will continue to be maintained. In 2012, the capacity of starting lead-acid batteries of Camel Co., Ltd. expanded rapidly, and the year-on-year growth of production and sales is expected to reach 40%, which will stabilize its leading position in the industry.
The expansion in other places helped the company expand its market and gradually improved its national layout. The growth rate of the automobile industry is declining, which will have an impact on the company's complete vehicle supporting business in the short term, but the company's strong marketing ability will promote the continuous expansion of the after-sales maintenance market share; Through acquisition or new construction in other places, the company's production capacity layout in South China and Northeast China has been steadily promoted, which will continue to expand new market space for the company and improve the local market share. The capacity expansion has the first mover advantage, the business layout is gradually improved, and the industry trend is good in the long run. We maintain the "recommended" rating of the company. According to the current production and sales situation of the company, and the accounting treatment of land compensation income is still to be finally confirmed by the company, we adjust the company's profit forecast. It is estimated that the EPS from 2012 to 2014 will be 0.56, 0.73 and 0.93 respectively, corresponding to the current share price PE of 14, 11 and 8 times respectively.
