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Binzhou Pistons (600960) achieved a revenue of 1.032 billion yuan from Binzhou Pistons in the first three quarters of this year, an increase of 66.22% year-on-year. However, due to the high price of non-ferrous metals such as aluminum and nickel and rare metals, the company's cost increased by 68.31% over the same period, which is more than 2% higher than the increase in main business income. As a result, the company's main profit margin gradually declined.
The company's main engine piston manufacturing, the product is mainly used in a variety of automotive, marine, motorcycle and military field, for the domestic including FAW Group, Dongfeng Motor, Shanghai Stocks, Yuchai machinery, Weichai Power and other well-known host manufacturers supporting, At the same time, it has obtained product certifications from internationally renowned automobile and engine manufacturers including German Dai-Ke, U.S. General Motors, Ford, Caterpillar, and Cummins. The company's piston products account for about 25% of the domestic engine market share, of which the market share of heavy-duty motorcycles is more than 40%, and is the leading company in the sub-industry.
In order to increase profitability, companies adjusted the product mix, reduced the proportion of pistons for farm machinery and motorcycles with weak profitability, expanded the production of pistons for automotive engines with strong profitability, and ensured final profitability by strictly controlling expenses. There was a 1.85-fold increase over the same period last year. However, it needs to be pointed out that due to the low base figure in the previous period, although the profit growth rate is relatively high, the absolute amount is not very large. In the first three quarters of 2007, the EPS was 0.224 yuan.
Although the auto industry maintained rapid development in the first three quarters of 2007, competition in the market was also fiercer during the same period. In the first three quarters of 2007, Binzhou Pistons' total receivables amounted to 359 million yuan, an increase of 47.16% year-on-year. The amount of payables reached 637 million yuan, a year-on-year increase of 19.73%, and inventory was 318 million yuan, a slight decrease of 0.55% year-on-year.
The increase in receivables payable indicates that the company can only adopt the same tactics to transfer part of its pressure to its upstream enterprises while it is being “compressed†by the entire vehicle company. Combined with the inventory turnover rate, receivables turnover rate and operating cash flow and other related indicators, we can see that the Binzhou Pistons' overall operation is still relatively stable and ideal.
Although the debt level of Binzhou Pistons has reached a level of 66.21%, an increase of 2.23 percentage points compared to the same period of last year, the current funds of enterprises are still relatively abundant and short-term solvency is acceptable.
According to the Binzhou Pistons' forecast for the growth of business performance, it can be known that the Binzhou Pistons' EPS in 2007 was above 0.25 yuan, an increase of more than 100% year-on-year. Although growth can still be maintained in the future, whether such high speed can continue depends on the continuous adjustment of the price level of raw materials such as non-ferrous metals and rare metals and the product mix of enterprises.