Incident: On the evening of February 29, the company issued an announcement on the action plan to promote the “Double Improvement of Quality and Return”.
Key points of investment
Improving and strengthening the main business, the acceleration of emerging momentum combined with overseas market expansion. The market position of the company's three traditional dominant industries is rising steadily by 47% to 57% in 2023. Among them, the market share of construction lifting machinery remains leading in the industry; the sales scale of construction lifting machinery is stable at number one in the world; the market share of products such as concrete machinery long boom pump trucks continues to rank first in the industry, and the market share of mixers remains second in the industry. The company's emerging industries have borne fruit. Among them, the market share of earthmoving machinery continues to rise, CUHK excavation sales are at the forefront of the industry, and domestic sales of aerial work machinery are leading. Combining cutting-edge technology such as clean energy, the company launched the first 100-ton national chemical electric drive mining dump truck to advance into the high-end mining equipment market. The phased results of the globalization strategy have been remarkable. Overseas revenue of 13.029 billion yuan was achieved in the first three quarters of 2023, an increase of 100.53% over the previous year, and the share of overseas revenue increased to 36.69%. The company is expected to achieve net profit of 3.38 billion yuan to 3.62 billion yuan in 2023, an increase of 47% to 57% over the previous year, and deducted non-net profit of 2.27 billion yuan to 2.42 billion yuan, an increase of 76% to 87% over the previous year.
Develop new quality productivity, adhere to R&D investment and actively transform results to build a moat for long-term development. The company takes “digitalization, intelligence, and greening” as the development direction and simultaneously builds 23 world-leading smart factories. At present, 10 factories, including the Earthmoving Machinery Park and the Aerial Work Machinery Park, have been completed and put into operation. The overall automation rate of production lines has been greatly increased, and the production process is energy efficient and environmentally friendly. The company attaches importance to the creation of green products, breaking through the two technology chains of lithium battery and hydrogen fuel. The company's entire range of construction machinery has been converted to new energy, and agricultural machinery such as electric tractors has also been launched. The company's predecessor was the former Minister of Construction Sha Construction Machinery Research Institute. It has extensive technical accumulation and participated in the formulation of domestic and foreign industry standards. The company clearly stipulates that investment in scientific research has exceeded 11 billion yuan in the past three years, of which nearly 3.5 billion yuan was invested in 2022, accounting for 8.3% of revenue. The company actively transforms scientific research results. The transformation rate of scientific and technological achievements in the past three years has exceeded 97%.
Pay attention to investor relationship management, continue to reward investor companies with excellent dividends and repurchase policies, further improve the investor relationship management system, and convey corporate value by normalizing performance briefings and increasing the frequency of senior management confronting investors. The company attaches importance to shareholder returns. Since listing, the company has accumulated dividends more than 25 times, exceeding the amount of dividends raised by the company from the stock market, and the overall historical dividend rate is about 42%; in the past three years, the company's cumulative cash dividends exceeded 8.3 billion yuan, accounting for 52% of net profit returned to mother during the same period; the company carried out two stock repurchases in 2019 and 2022 to 2023, for a total of nearly 4.8 billion yuan.
The construction machinery industry has built up, and the recovery is a trilogy: the start of the renewal cycle, improvement in domestic demand, and steady export renewal: domestic estimates are based on the 8-9th year of excavators as the peak renewal period, and it is expected that 2024 will begin a new renewal cycle. Domestic demand: As real estate and infrastructure policies continue to be favorable, the operating rate is expected to rise, and domestic demand will gradually improve. Exports: Overseas market share continues to rise, and China's leaders are gradually becoming global leaders. In 2023, China's cumulative export value of construction machinery (in RMB) was 341.405 billion yuan, an increase of 16% over the previous year.
Profit forecast: Net profit from 2023 to 2025 is expected to be 3.5 billion, 4.5 billion yuan, and 6 billion yuan, an increase of 52%, 29%, and 33% over the previous year. PE is 20, 15, and 12 times, maintaining the purchase rating.
Risk warning: 1) Infrastructure investment and housing commencement fell short of expectations; 2) Exports fell short of expectations