Tutu shares: performance in line with expected leading advantages

Steady growth, performance in line with expectations The company's operating income for the first half of the year was 1.432 billion yuan, a year-on-year increase of 26.99%, and the net profit attributable to owners of the parent company was 220 million yuan, a year-on-year increase of 34.59%, and a diluted earnings per share of 0.57 yuan. In line with expectations. From a quarterly perspective, the company’s operating income in the second quarter increased by 22.34% compared to the previous quarter, and its net profit attributable to shareholders of the parent company increased by 19.38%.

Disperse dyes are profitable and stable. Reactive dyes will welcome the inflection point. The company's disperse dyes in the first half of the year will have an income of 936 million yuan, a year-on-year increase of 21.27%, an increase of 27.56% compared with 2010H2, and the gross profit of disperse dyes will increase from 32.68% in 2010H1 to 33.57% in 2010H2. With 33.90% of 2011H1, the profitability was steadily improved with the high price of upstream products, reflecting the company's strong discourse power in the disperse dye industry and its high cost transferability. In terms of reactive dyes, the first half of the year achieved revenue of 267 million yuan, a year-on-year increase of 5.92%, a slight increase of 3.87% from the previous quarter, and gross margin decreased from the 17% level last year to 13.31%, which was related to the decline in demand caused by high cotton prices in the first half of the year. With the return of cotton prices, the possibility of a rebound in demand for reactive dyes from cotton cloth usage is gradually increasing, and profitability is likely to improve in the second half of the year. In addition, the profitability of insurance powder and other products also fell to varying degrees. This was related to the high prices of raw materials and weak demand in the first half of the year. However, this part of the products accounted for a relatively small proportion and had little impact on the overall performance of the company.

The backward integration strategy is steadily advancing, and the profitability of the dye business continues to intensify. The various benzene, naphthalene, and chemical product financing projects currently supported by the dye business are steadily advancing. It is expected to be launched in succession from 2013 to 2014. In addition, The company acquired companies such as Jiangsu Mingsheng, Jiangsu, and Lirui to accelerate the matching of dye raw materials and intermediates, thereby accelerating the backward integration strategy, achieving optimized cost control, and increasing the profitability of the existing dye business. High-end products put into production + overseas layout, opening up new growth space. The annual output of 7,000 tons of high-grade new disperse dyes, which is one of the company's fund-raising projects, will be put into production in 2012, and the fastest earnings will be realized in 2011. At the same time, the company acquired Yorkshire Holdings, accelerating the marketing network layout of overseas markets, then using Yorkshire's channel advantages and the cost advantages of raising high-end dye products, accelerating the expansion of overseas markets, and thus going beyond the high growth ceiling of the company's domestic dye business. Build a new high-growth space in the international market. The robust dye faucet maintains a "recommended" rating. The company is a stable investment with relatively stable growth and a clearer growth target. In addition, the company also holds 607 million yuan in super-raised funds. The investment is a focus of concern.