3G investment slowdown, the company is not optimistic about results for the year. Telecommunications industry investment in fixed assets during the first half of this year dropped 29%, lead-acid backup power products company with 2009 revenues were flat. First half of the domestic price competition, product unit price fell by 5%; and orders with the company chosen to relax, a large number of orders after the gross margin will be reduced. Although the market next year after the restore stable growth but low profitability during the year the company expects to maintain performance is not optimistic about the future is expected to restore a reasonable level of gross margin to 22%.
The progress of the leading overseas market had expanded. 30% of our products for the domestic market at present, matching 30% for large customers, 30% export-oriented domestic product to overseas markets certification about two years time, progress in this area ahead of other domestic enterprises. As developing countries, telecommunications development is still in the early stage of the demand for standby power has great potential, the company plans to export ratio of two to three years to 50%. Sales in overseas markets and domestic level are very margin.
Lithium battery products communicate mainly with iron. Annual output of 40 million projects will be Ah lithium iron phosphate production by the end of 2011; can contribute 350 million in revenue and 28 million net profits. Lithium iron can be used for small communications base stations, the current lead-acid backup power is only complemented by the possibility of future alternatives exist. Company’s current lithium iron materials are purchased from domestic manufacturers. Multi-point is distribution of R & D direction. In lead-acid battery, lead carbon batteries, fuel cells, lithium batteries have the power or willingness to invest R & D projects. The company will rely on existing lead-acid and iron lithium battery applications in the communications field, and gradually into the power and energy storage batteries in the field, and to the cathode material lithium iron in upstream development.
Higher public before PE, PB end of the plate average, raise funds over the decision to invest in the future. 2010 to 2012, the company expects EPS for the 0.43, 0.73, 0.86 dollars, corresponding to the current share price PE75, 44, 37 times. But the company PB is 3.19X, plates in the battery is low, with only Shanshangufen [20.25 -3.02%] was slightly higher. The company the funds raised 2 billion Yuan, except raise 600 million Yuan investment project to use, there are about 1.4 billion super-raise funds, raise funds for contributions to super only the net assets of 6 Yuan per share. We believe that the company raise funds is likely to invest over two aspects: First, use lead-acid or HEV lithium battery R & D and industrialization projects, and second, through cooperation, acquisitions involved in the production of cathode material lithium iron. As the ultra raise funds to invest in not yet available, we temporarily give rating and target price.