Huafu color spinning fixed increase in the end of the ban or into the stock price rise catalyst

Every reporter Yang Ke this week, the color spinning industry leading Huafu color spinning (002042, closing price of 26.66 Yuan) published annual report. 2010, its net profit was 371 million yuan, an increase of 154%. Earnings per share (EPS) 1.56 yuan, more than previous brokerage expected. Interestingly, the Friday closing price of the stock, has fallen below the equity incentive of the right to 27.77 yuan. And the lifting of more than 42.55 million new shares in December this year suggests the company will have more incentive to do high performance this year? First quarter color spinning price bullish according to the disclosure, 2010, Huafu color spinning operating income of 4.783 billion yuan, an increase of 45.4%. EPS1.56 yuan, grew 151.6% year-on-year. Generally higher than the previous estimated value of the securities 18%~44% range. However, careful observation of the HUAFU Annual report can be found that 2010 its performance is high growth, mainly depends on two factors: upstream cotton prices and color spinning prices. According to the first textile network data show that last year, the cotton 328-level index has risen 85% to 27508 yuan/ton. Over the same period, yarn prices have gone up. To the human cotton yarn 20S as the benchmark, its early quotation in 22000 yuan, to the end of the year has risen to 28300 yuan, the cumulative gain of 29%. In addition, the rise of cotton also for the color spinning price provides an opportunity. In fact, this year, cotton prices still "high fever" constantly. As of March 31, the 328-level spot price of cotton 30561 yuan/ton. A small increase of 1.5% in the month. But according to statistics, cotton prices still rose 13% in the first 3 months of this year. A brokerage clothing researcher to the "Daily economic news" Reporter said, since this year, because cotton prices are still higher, huafu color spinning in the first quarter will certainly raise prices, estimated at about 30%. The future gross margin should be kept stable, considering that the company can basically transfer costs. Citic Securities also said that the company is expected to increase the first quarter of 2011 color spinning price of 20%, sales growth also reached two digits, net profit growth is expected to reach about 30%. But the late cotton price fluctuations, fear led to delay the next single clothing enterprises, increase business difficulty. The reporter found that, although the current spinning downstream demand can be warmer still has uncertainty, but huafu color spinning customer structure is basically stable. 2010, its top 5 customers sold 777 million yuan, accounting for more than 16% of sales revenue. Accounts receivable balance of 156 million yuan, accounting for the total balance of accounts receivable nearly 43%. The company said the top 5 suppliers had not undergone any major changes and that there was no single vendor purchase exceeding 30% per cent of total purchases. Restricted shares lifted or pushed to do performance power Huafu color spinning was announced in February, to 62 employees, including senior executives, 10 million share options, valid for 4 years. The incentive object can be divided into 3 periods according to the right of 4:3:3 in the right days, the right price is 27.77 yuan. In addition, the right of Access is: 2009 year net profit (excluding Non-recurrent profit and loss) as the base, 2011-2013 years relative to the 2009 net profit increaseSpeed is not less than 112%, 154%, 205%. HUAFU Yarn 2009 Net profit of 151 million yuan, that is, to achieve the right of access conditions, Huafu yarn 2011-2013 years of net profit should be reached 320 million yuan, 380 million yuan and 460 million yuan respectively. As a result of the 2010 net profit of 314 million yuan, which means that this year, as long as the net profit growth of more than 2% per cent can be "clearance". A southern brokerage clothing researcher believes that Huafu color spinning 2010 years of substantial growth, so the performance of this year to achieve the right to do less difficult. Purely from the perspective of equity incentives, the company this year to do the driving force may not be too big, otherwise, next year to do high performance pressure will be greater. However, this judgement ignores another factor, the 42.55 million shares that participate in the directional issuance will be lifted this year December 16. According to the announcement, the company last November 26 in the direction of the issuance of 7 objects to the issue of 42.553 million shares, the IPO price set at 23.5 yuan. From the participants, Bo-time fund has been allocated the largest number, reached 10 million shares. Citic Securities and the Ka Real fund were each allocated 6 million shares. Other objects include Galaxy Investment Management, China Airlines Xin Hong Kong guarantee. In addition, the directional additional plan invests two major projects, namely Xinjiang five canals 120,000 ingot color spinning and Zhejiang Shangyu 80,000 spindle half fine spinning line project. Among them, the former will be a new 120,000-ingot compact spinning production line, it is expected that the construction progress of two years, put into production, will add high-grade pure cotton compact spinning production capacity of 22600 tons/year, the latter to expand the 80,000 ingot high-end half fine yarn production line, after the production of new types of high-end semi-fine spinning line capacity of 12,000 tons/year. "The stock price is expected to rise in the second half because of the lifting of a large number of restricted shares this December. "The above brokerage clothing researcher thinks, only two level market performance is good, can let participate in the directional additional customer satisfaction." The catalyst for rising stock prices may come from a positive performance rather than a directed additional project. From this point of view, the second half of the company to do high performance momentum is still relatively large.