Huafu Color Spinning Revised Performance Forecast Decreased By 50%-80%

(002042) issued a revised notice of first half performance notice at noon this afternoon. After revision, the company expects that the net profit attributable to shareholders of Listed Companies in this year will be 48 million 245 thousand and 400 yuan -12061.36 million yuan, down by 50%-80% compared with the same period last year.

The company said that the decline in its revenues was mainly due to the drop in cotton prices and the decline in yarn prices; the cost of the options and other options reduced profits; the merger of Kuitun Jinfu handled the loss of stock yarn.

The cost of finance has increased. The rate of financial expenses has increased by 2.21 percentage points over the same period last year, reaching the highest level of 4.57%. This is mainly due to the increase in the scale of company financing. The current bill financing has increased, and the balance at the end of the notes payable has increased by 402 million 900 thousand yuan compared with the beginning balance, increasing by 182.72%.

The reasons for the revision of the performance include, as the European debt crisis continues, the US dollar hedging function is further highlighted, and the demand for the international market is weak. Market risk aversion has led to a general decline in global commodities.

In addition, some orders went to India, Vietnam, Pakistan and other countries, and the international market share of China's cotton textiles decreased.

At the same time, domestic cotton prices are much higher than the international market, leading to a significant increase in China's cotton yarn imports.

In this industry context, demand is decreasing, and cotton prices have dropped in stages.

Under the market mentality of buying or selling,

Sales are facing the situation of terminal pressure sheet and price reduction.

In the 1-4 months of 2012, the company faced an adverse objective environment. Although sales increased by 35% over the same period, the yarn sales price dropped by nearly 30% during the same period, and the gross profit margin and gross margin of the company decreased periodically.

Affected by this, the company expects the two quarter performance will decline 50%-80% compared with the same period last year.

To maintain the "prudent recommendation" rating, the company's revenue in the 2012-2014 years is 5 billion 811 million yuan, 6 billion 744 million yuan and 7 billion 754 million yuan respectively, corresponding to EPS, which are 0.734 yuan, 0.845 yuan and 1.001 yuan respectively, corresponding to the current stock price PE of 11.45X, 9.95X and 8.39X respectively, and the "prudent recommendation" rating should be maintained.