Xia Ke Environmental Protection: Textile Industry To Pick Up &Nbsp; Color Cotton Color Spinning Production Increased.

In 2009 1-9, the company achieved operating income of 876 million yuan, an increase of 16.2% over the same period last year, and realized operating profit of 14 million 910 thousand yuan, a decrease of 64.2% over the same period last year. The net profit of the parent company was 13 million 980 thousand yuan, a decrease of 60.8% over the same period, and 0.08 yuan per share.

The output and sales of Anxing company and color textile material distribution center increased, and business income increased 1.9% in the third quarter.

During the reporting period, the company's accounts receivable increased by 34.4% from the beginning of the year, mainly due to the increase in operating income and increased receivables.

In addition, this year, because of the increase of Anxing production capacity and the increase of the coloured cotton production capacity, the inventory increased by 17.5% over the beginning of this year.

In 2009 7-9, the company realized operating income of 307 million yuan, an increase of 1.9% compared with the same period last year. Gross profit margin was 8.7%, down 1 percentage points compared to the same period last year. Net profit attributable to parent company was 3 million 730 thousand yuan, down 59.2% from the same period last year.

The textile industry is getting warmer.

30 million shares of non-public offering and 145 million yuan of net proceeds are used to repay bank loans.

The company issued 30 million shares in Shenzhen Stock Exchange in August 31, 2009.

The issue price is 5.12 yuan / share, and the net proceeds are 145 million yuan, which is used to repay bank loans amounting to 155 million yuan.

After the issue was completed, China based mining held 10.4% of the total share capital and became the second largest shareholder of the company.

Risk warning.

(1) the uncertainty of the price trend of products and raw materials; (2) the uncertainty of the normal output of the new 60 thousand ton / year chlorinated polyethylene plant; (3) the uncertainty of the hydrated hydrazine project returning to normal.

Earnings forecasts and ratings.

We expect the company's earnings per share for 2009-2011 years to be 0.09 yuan, 0.19 yuan and 0.27 yuan respectively, and the corresponding dynamic price earnings ratios are 123 times, 61 times and 42 times respectively, based on the October 26th closing price of 11.39 yuan.

Considering that the company's current share price reflects the company's performance, we maintain the company's "neutral" investment rating.