According to a report published by Daiwa, Lijin (0558.HK) management aims to deliver 20 oversized die-casting machines in fiscal year 2023, an increase of 40% year-on-year, with a gross margin higher than 40%. The bank said it is optimistic about single-piece giant casting machine parts used in new energy vehicles, as well as future demand for giant die-casting machines, mainly because more OEMs will join the competition.
The bank said that rising demand for aluminum die-cast battery trays, subframes, and body structural parts for new energy vehicles is expected to drive sales of 1,000 to 5,000 tons of automotive machines; the bank expects that with the release of production capacity in the middle of next year, the company's revenue from large to very large die-casting machines will grow strongly.
The bank said that since the machine delivery performance of all businesses fell short of expectations, it lowered the company's net profit forecast for 2023-25 by 24% to 44%, cut its target price from HK$23 to HK$8.6, and lowered its rating from “buying” to “outperforming the market”.