Fengyuan Biochemistry: Focus on the main industry and develop steadily

from January to June 2010, the Company achieved operating income of RMB2,779 million, up 21.02% YoY; operating profit was RMB196 million, compared with RMB266 million in the same period last year; net profit attributable to the parent company was RMB124 million, up 1.13% YoY; and basic earnings per share was RMB0.129fuel ethanol business grew steadily, subsidies remained the company's main source of profitsDuring the reporting period, the Company's fuel ethanol business achieved revenue of RMB1.349 billion, up 15.01% YoY, and gross margin reached -10.75%, up 3.14 percentage points from the same period last yearIn the first half of the year, the company received a total of 355 million yuan in government subsidies, of which 334 million yuan was subsidized for fuel ethanol, a decrease of 20.5% yoY, mainly due to the adjustment of the fuel ethanol elastic subsidy standard to 1,659 yuan/tonne in the first quarter, a decrease of 19.29% from the 2009 subsidy standardIn recent years, the proportion of fuel ethanol business in operating income has increased year by year, and it is expected that the contribution of fuel ethanol business to the company's revenue will stabilize at about 50%citric acid products improved rapidly, amino acid sand acid products increased rapidlyDuring the reporting period, the gross margin of citric acid products, which accounted for nearly 21% of the main revenue, reached 19.03 percent, and revenue increased by 15.09 percent year-on-yearRevenue of amino acid products increased by nearly 37.93% YoY, while lactic acid products increased by 43.69% YoYexports recovered slightly and the future will reduce exchange rate risk through forward settlement and sale of foreign exchange transactionsDuring the reporting period, the company's export revenue reached 671 million yuan, up 64.78 percent year-on-year, accounting for 24.3 percent of the main business revenue, up 6.4 percent year-on-yearIn view of the company's citric acid products more than 65% of exports, while lysine export business is also expanding, export business is mainly in the United States dollar, euro settlement, the full year forward sales of foreign exchange business is expected to reach 90 million U.Sdollars, the company will take the way forward settlement of foreign exchange exchange in order to reduce the risk of exchange rate fluctuations, focusing on production and operationthe completion of some technical reform projects, the future performance of stable growth can be expectedDuring the reporting period, the company completed the fuel ethanol bottleneck technology reform project and has been put into operation, completed 40,000 tons / year 65% lysine technical reform project main project construction, is expected to be put into operation in the second half of the trialIt is expected that the company's costs will decrease steadily in the future as the technical reform project is put into operationearnings forecasts and ratingsThe company's EPS for 2010-2012 is expected to be RMB0.369, RMB0.504 and RMB0.661 respectively, and the corresponding dynamic Price-to-earnings ratios are RMB20X, 15X and RMB11X, respectively, based on the closing price of RMB7.4 on July 23Considering that the company's development is becoming more stable and the cost rate gradually decreased during the period, the consolidation expectation is still in place, the current share price has a certain margin of safety, temporarily maintain ingunchanged "neutral" ratingfrom January to June 2010, the Company achieved operating income of RMB2,779 million, up 21.02% YoY; operating profit was RMB196 million, compared with RMB266 million in the same period last year; net profit attributable to the parent company was RMB124 million, up 1.13% YoY; and basic earnings per share was RMB0.129fuel ethanol business grew steadily, subsidies remained the company's main source of profitsDuring the reporting period, the Company's fuel ethanol business achieved revenue of RMB1.349 billion, up 15.01% YoY, and gross margin reached -10.75%, up 3.14 percentage points from the same period last yearIn the first half of the year, the company received a total of 355 million yuan in government subsidies, of which 334 million yuan was subsidized for fuel ethanol, a decrease of 20.5% yoY, mainly due to the adjustment of the fuel ethanol elastic subsidy standard to 1,659 yuan/tonne in the first quarter, a decrease of 19.29% from the 2009 subsidy standardIn recent years, the proportion of fuel ethanol business in operating income has increased year by year, and it is expected that the contribution of fuel ethanol business to the company's revenue will stabilize at about 50%citric acid products improved rapidly, amino acid sand acid products increased rapidlyDuring the reporting period, the gross margin of citric acid products, which accounted for nearly 21% of the main revenue, reached 19.03 percent, and revenue increased by 15.09 percent year-on-yearRevenue of amino acid products increased by nearly 37.93% YoY, while lactic acid products increased by 43.69% YoYexports recovered slightly and the future will reduce exchange rate risk through forward settlement and sale of foreign exchange transactionsDuring the reporting period, the company's export revenue reached 671 million yuan, up 64.78 percent year-on-year, accounting for 24.3 percent of the main business revenue, up 6.4 percent year-on-yearIn view of the company's citric acid products more than 65% of exports, while lysine export business is also expanding, export business is mainly in the United States dollar, euro settlement, the full year forward sales of foreign exchange business is expected to reach 90 million U.Sdollars, the company will take the way forward settlement of foreign exchange exchange in order to reduce the risk of exchange rate fluctuations, focusing on production and operationthe completion of some technical reform projects, the future performance of stable growth can be expectedDuring the reporting period, the company completed the fuel ethanol bottleneck technology reform project and has been put into operation, completed 40,000 tons / year 65% lysine technical reform project main project construction, is expected to be put into operation in the second half of the trialIt is expected that the company's costs will decrease steadily in the future as the technical reform project is put into operation earnings forecasts and ratings The company's EPS for 2010-2012 is expected to be RMB0.369, RMB0.504 and RMB0.661 respectively, and the corresponding dynamic Price-to-earnings ratios are RMB20X, 15X and RMB11X, respectively, based on the closing price of RMB7.4 on July 23 Considering that the company's development is becoming more stable and the cost rate gradually decreased during the period, the consolidation expectation is still in place, the current share price has a certain margin of safety, temporarily maintain ingunchanged "neutral" rating (name)