2023 performance improved across the board, and profit margins rebounded sharply
In 2023, Zoomlion Heavy Industries achieved operating income of 47.075 billion yuan, up 13.08% year on year; net profit to mother was 3,506 billion yuan, up 52.04% year on year. The gross profit margin was 27.54%, up 5.71 percentage points year on year; the net profit margin was 8.01%, up 2.28 percentage points year on year. Net cash inflow from operating activities was $2,713 billion, up 11.88% year on year. The company plans to pay a dividend of $0.32 per share, with a dividend rate of 79%.
The market position of construction machinery products has been rising steadily. In 2023, the company's construction machinery business revenue was 44.486 billion yuan, up 13.1% year-on-year, and the revenue of all construction machinery business segments achieved positive growth. In terms of traditional dominant business, concrete machinery revenue was 8.598 billion yuan, up 1.6% year on year, and crane revenue was 19.290 billion yuan, up 1.6% year on year; the market share of concrete machinery long boom pumps and mixing plants remained the first in the industry, and the market share of mixers remained second in the industry; truck cranes with a sales volume of 25 tons or more ranked first in the industry, and crawler cranes of 500 tons and above ranked first in the industry. The construction of the Chongqing truck-mounted crane factory was fully launched; the sales scale of construction lifting machinery ranked first in the world, and R generation tower cranes formed the largest market coverage. In terms of emerging potential businesses, earthmoving machinery's revenue was 6.648 billion yuan, up 89.3% year on year. Among them, the domestic market share of large excavators doubled year on year, and overseas sales scale increased by more than 100% year on year; aerial work machinery revenue was 5.707 billion yuan, up 24.2% year on year, quickly becoming one of the leading domestic customers in the domestic market. The market share of small and medium-sized customers in the domestic market ranked first, becoming a model for the company's rapid growth; the sales scale of mining machinery grew 140% year on year, and the sales scale was nearly 800 million yuan.
Overseas business continues to break through record highs, and is expected to achieve sustainable growth. In 2023, the company's overseas market revenue was 17.905 billion yuan, an increase of 79.2% over the previous year. The company's engineering hoisting machinery became the brand with the highest market share in Turkey and Central Asia; built products to maintain the number one position in the Turkish market; the market share of Saudi Arabia, Malaysia, Vietnam, Kenya and other markets increased rapidly through localization. The company has successively built more than 30 first-level business airports and more than 350 second-level outlets around the world. The total number of overseas localized employees exceeds 3,000, and its products cover more than 140 countries and regions. Italy's CIFA expanded and upgraded to a comprehensive global company with a variety of products. Germany's Motech and Wilbert technologies accelerated integration to create a central global airport for China Union Europe.
Maintain a “buy” rating
The company's performance was excellent, and profit margins rebounded. As a result, we slightly raised the company's 24-25 net profit forecast of 1.1%/0.2% to 48.2/6.20 billion yuan, and introduced the 26-year net profit forecast of 7.43 billion yuan, corresponding to the 24-26 EPS of 0.56/0.71/0.86 yuan, respectively. The company's overseas export potential is huge, and profitability is expected to bottom up, maintaining the company's A share and H share “buy” ratings.
Risk warning: industry competition increases risk, risk of downstream sentiment decline, risk of overseas exports falling short of expectations