Yantai Spandex: The First Half Of 2010 Spandex Boom &Nbsp, The Performance Is In Line With Expectations.

In the first half of 2010, the total revenue of the company increased by 37.4% compared with the same period last year. The net profit attributable to the shareholders of the listed companies increased by 390.5% compared to the same period last year, and the basic earnings per share was 0.55 yuan, which was in line with our expectation.

Affected by the recovery of the downstream textile industry, spandex prices have been rising since the two quarter of last year.

At the beginning of 2010, the price of 40D spandex was 48 thousand yuan / ton, and then rapidly increased to 62 thousand yuan / ton in the middle of March, down to the current 58 thousand yuan / ton in late May.

We believe that at present, the spandex industry is at a high economic point. As the downstream textile and garment industry is likely to recede in the second half of the year, the possibility that the price of spandex will rise again in the second half is unlikely.

Optimistic position

The financial crisis has led to a sharp decline in demand for aramid in Europe and the United States. The export of aramid exports has declined, and we expect its operating rate to drop to about 6 in 2009.

Affected by the domestic and foreign economies, especially the recovery of the international market, the export of aramid products increased after the Spring Festival, and the orders increased and production gradually increased. The price also rose by 8 thousand yuan / ton in 4 and May (currently the tax price is about 140 thousand yuan / ton).

With the global economic recovery, we believe that the company's aramid business will continue to improve in the future.

We expect that the remaining 3 thousand tons capacity of the 5 thousand tons / year medical spandex project is expected to be put into operation in October 2010. The 7 thousand ton / year comfortable spandex project is expected to be put into operation at the end of June 2011, and the 1000 ton / year aramid project is expected to be put into operation in May 2011.

Maintain "recommended" rating

We believe that the aramid business is expected to continue to improve, steady expansion of capacity, the company's future performance will continue to grow steadily, it is estimated that 2010 and 2011 EPS were 0.95, 1.17 yuan, corresponding to the closing price dynamic price earnings ratio of 22 and 18 times, to maintain the "recommended" rating.