Lower prices caused sales Batteryis is lower than expected

"2009, the company achieved Ibm thinkpad t42 series batteryoperating income of 2.23 billion yuan, and increase 4.46%, net profit attributable to parent company 197 million, EPS is 0.7 yuan, and up to 52.72%, it is below our expectations of 0.75 yuan." it came from a a company manager's remarks in China .

Lower prices caused sales of Ibm thinkpad t42 battery is lower than expected . We believe that due to reasons of the order cycle, ,th price in 2009 lead-acid battery is from high to low, unit shipments in the second half of the battery prices fell 15% -20%,it become the main reasons of a battery sales rose only 3%, Meanwhile, orders for delayed delivery of the end part of the battery also have negative impact. We expect revenue growth in 2010, batteries will be accompanied by the commissioning of new production capacity to achieve 35%.

Battery Costs caused by the rate of decline in income growth increased rapidly. In 2009,prices and the decline in demand overseas have an impact on the electrical business , there were 11% negative growth in the the electrical business, while increasing traction transformers caused transportation costs is increasing with it , so management fee rate and cost of sales rate rose by 1.1% and 1.4% respectively. We expect the next two years, as it is subject to the impact of return to revenue growth, cost rate(it contains the Ibm thinkpad r50 series battery sales cost) will decline.

2010 Motor business will quickly recover. Price of Ibm thinkpad r50p battery and motor business will quickly recover, we expect the electric business, year on year growth rate will reach 40%. At the same time, we will see the company-specific ABS motor vehicle will be the highlight of the new business.

2010, consolidated gross margin level will be maintained at above 20%. Despite the rising costs will lead to gross margin of transformers and Acer Battery operations declining by 4% -5% , but the profitability of these two businesses is still far better than conventional motor business, and thus through the product structure adjustment, the company still is able to maintain 20 % or more of the consolidated gross margin level.

Additional items will create new growth points. Company intends to make proposed additional projects is no more than 8,000 additional shares, the new project will constitute a new growth point in those projects ,such as transformers, energy-efficient small and medium sized motors and large-capacity lithium-ion Ibm thinkpad z61e battery project.

Lower profit from Ibm thinkpad z61p battery sales forecasts and investment ratings. We slightly reduced the company's performance forecast annual, EPS is expected to 10,11,12 were 0.93 yuan, 1.17 yuan and 1.45 yuan. Given the current share price has reached our target price of 25 yuan, we have downgraded from buy to overweight.

The article via: laptopinfo

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