Luolai Home Textile: Obtained The Certification Of High-Tech Enterprise&Nbsp; Increase Profit Forecast

Event: The company issued an announcement on April 19, and recently received High tech enterprises Certificate, 15% tax rate from the year when the high-tech enterprise was recognized (i.e. 2010, 2011 and 2012) favoured policy 。

The preferential income tax policy for high-tech enterprises has promoted the performance to a higher level. The amount of income tax in the 2010 annual report released on April 6 was calculated at the tax rate of 25%. The net profit calculated at the income tax rate of 15% increased by 30.579 million yuan (the net profit attributable to the listed company increased by 14.58%), and the 2010 basic earnings per share increased by 0.218 yuan. The company will make corrections to the 2010 annual report in the near future. According to our calculation, the growth rate of net profit attributable to listed companies in 2010 after correction has increased from 43.13% to 68.13%.

Multi brand strategy fits in with multi-channel development to Brand promotes sales Our strategy is suitable for the development characteristics of the industry and the company. In 2010, the revenue growth of the company's main brand Luolai was 52%, while that of other brands was 23 percentage points higher than that of the main brand. The revenue share of other brands increased from 16.4% in 2009 to 18.5% in 2010. We believe that after the horizontal integration of multi brand strategy has made phased progress, the company's next multi brand strategy will be extended vertically. It is about to increase the recognition of various brands, enrich product lines, and deeply explore the meaning of brands. Of course, the brand strategy of the next stage will still focus on the main brand Luolai, and other brands will form an effective complement. We believe that in 2011, the company will continue to increase the promotion of other brands and increase the share of each sub brand in the market segment, in line with the company's national product layout strategy.

Raise the profit forecast for the next two years and reiterate the buy rating. The company enjoyed the preferential income tax policy from 2010 to 2012, so we raised the net profit of 2011-2012 to 339 million yuan and 455 million yuan, corresponding to the basic earnings per share of 2011-2012 to 2.42 yuan and 3.25 yuan (the original forecast was 2.16 yuan and 2.88 yuan), and raised the target price of 84.70-89.37 yuan (the original forecast was 75.6-80.64 yuan), We believe that the company's performance in the first quarter is expected to maintain a high growth trend and maintain the buy rating.