Incident: The company disclosed the “2023 Annual Report”. In 2023, it achieved revenue of 47.074 billion yuan (yoy +13.08%), net profit of 3,506 million yuan (yoy +52.04%), gross profit margin of 27.54% (yoy+5.71pct), net profit of 8.01% (yoy+2.28pct); 2023Q4 achieved revenue of 11.561 billion yuan (yoy +5.26%), net profit of 651 million yuan (yoy +375.18%), gross profit margin of 26.89% ( yoy+2.66pct), net profit margin 6.13% (yoy+0.93pct).
Emerging businesses are developing rapidly, and earthmoving, aerial, and mining machinery are performing brilliantly. In 2023, facing the downward cycle of the industry, the company achieved revenue of 47.074 billion yuan. By business, the company achieved stable operation in traditional industries, with steady revenue growth: 1) lifting machinery: revenue of 19.291 billion yuan, yoy +1.64%, gross profit margin of 31.04%, yoy+8.13pct; 2) concrete machinery: revenue of 8.598 billion yuan, yoy +1.63%, gross profit margin of 22.92%, yoy+1.89pct. Emerging businesses have accelerated development and achieved new breakthroughs, and earthmoving, aerial and mining machinery performed brilliantly: 1) Earthmoving machinery: revenue of 6.648 billion yuan, yoy +89.32%, gross profit margin 27.93%, yoy+4.45pct, overseas sales scale increased by more than 100% year on year, and the domestic market share of medium and large excavators doubled year on year; 2) High-altitude machinery: revenue of 5.707 billion yuan, yoy +24.16%, gross sales margin of 22.66%, yoy+1.85pct, achieving the first market share of small and medium-sized customers in the domestic market; 3 ) Mining machinery: revenue close to 800 million yuan, yoy +140.00%; 4) Agricultural machinery: revenue of 2,092 billion yuan, yoy -2.17%, gross sales margin of 11.74%, yoy +7.31pct.
Deeply involved in the “Belt and Road”, overseas revenue now accounts for more than 38%. In 2023, the company's overseas revenue was 17.905 billion yuan, yoy +79.20%, accounting for 38.04% of revenue, yoy+14.04pct. The company has successively built more than 30 first-level business airports and more than 350 second-level outlets around the world. The product market now covers more than 140 countries and regions around the world. In particular, countries along the “Belt and Road” such as Italy, Germany, Mexico, Brazil, Turkey, and India have achieved effective breakthroughs in key markets with industrial parks or production bases, and the product market share has increased rapidly. As of the disclosure date of the annual report, the company's construction hoisting machinery has become the brand with the highest share in Turkey and Central Asia; it maintains the number one position in the Turkish market. Markets such as Saudi Arabia, Malaysia, Vietnam, and Kenya have rapidly increased their market share through localization efforts.
Continue to promote the construction of smart industrial cities and consolidate the foundation for the company's high-quality development. With Zhonglian Smart Industrial City as the core, the company comprehensively promotes the construction of smart factories from mainframes to components. By the end of 2023, the company had built and put into operation a total of 11 smart factories. Among them, the national intelligent manufacturing demonstration project “Excavator Intelligent Manufacturing Demonstration Factory” had achieved a monthly output of more than 1,200 units; the Tower Crane Smart Factory was rated as the 2023 Intelligent Manufacturing Demonstration Factory Unveiling Unit of the Ministry of Industry and Information Technology. Construction of eight smart factories, including construction machinery, construction machinery, truck-mounted cranes, engineering axles, and high-end hydraulic cylinders, is being accelerated, further consolidating the company's high-quality development foundation.
Investment advice: Zoomlion Heavy Industries has a stable position in the construction machinery product market. We predict that the company's revenue for 2024-2026 will be 560.45, 659.98, and 77.889 billion yuan, respectively, and EPS will be 0.58, 0.77, and 0.98 yuan respectively. The current stock price is 14, 10, and 8 times PE, respectively, maintaining the “recommended” rating.
Risk warning: Overseas market expansion falls short of expectations; domestic construction machinery industry cycle downturn risk.