The company realized revenue of 578 million yuan, an increase of 15.7 percent yoy; operating profit: 147 million yuan, an increase of 18.61percent yoy; net profit attributable to the parent company: 134 million yuan, an increase of 24.73 percent yoy; EPS: 0.60 yuan; no cash dividends or conversion of shares for 07.
During the reporting period, the company's main business saw steady growth. Due to rising prices of raw materials, the company’s gross margin fell by a greater degree. At the same time, period cost rate declined. The income tax offset by the investment on state-owned equipment was 9.66 million yuan, so the growth rate of net profit was higher than that of total profit. The relocation of the new plant will become the key factor for the growth of the company in 08.
We forecast the company’s EPS will be 0.67 yuan in 08 and 0.82 yuan in 09. As the company is the domestic leading manufacturer of film capacitors and the next few years will the period of rapid growth, we are optimistic about the company's future development and "overweight" rating is reiterated.