Brief performance review
On April 9, the company released a performance forecast for the first quarter of '24. 24Q1 is expected to achieve net profit of 4.57 to 536 million yuan, +45-70% year-on-year; net profit after deduction of 413-492 million yuan, or +51%-80% year-on-year, exceeding market expectations.
Management analysis
Overseas: Focus on export opportunities, with overseas revenue accounting for more than 50% in 24Q1. According to the announcement, the company's overseas revenue in 21-23 was 59.8/86.9/11.46 billion yuan, accounting for 20.8%/32.8%/41.7% of revenue, and the company expanded smoothly in overseas markets in '24, and the 24Q1 company's share of international market revenue increased to 50%; overseas market profitability significantly exceeded the domestic market. The company's gross margin in overseas markets reached 27.74% in '23, which is 11.86pcts higher than the gross margin of the domestic market. The increase in overseas revenue is expected to further optimize the company's overall profitability. The company's gross profit margin and net margin reached 20.82% and 3.42% respectively in '23, up 4.02pcts and 0.98pcts year-on-year. The profit level improved markedly. As the company's overseas share continues to increase, the company's overall profitability is expected to improve further. The company's net profit margin is expected to be 5.2%/6.0%/6.6% in 23-25.
Diversified development, smooth cycle fluctuations. The company vigorously developed strategic new businesses and growth businesses such as mining machinery, aerial machinery, agricultural machinery, and industrial vehicles. The sales revenue of the company's aerial machinery business was +112% in '23; through diversified development, the company's share of earthmoving machinery revenue dropped from 70+% in '20 to 58% in '23, continuously weakening the impact of the industry cycle on the company's revenue fluctuations.
The market share of many businesses has been rising steadily, consolidating the market position. According to the announcement, the market share of the company's core main business loaders and excavators maintained its position in the industry. The market share of the company's loaders ranked first in the industry in 23 years; the sales growth rate of the excavator business outperformed the industry by more than 20 pcts, and the market share increased by 3 pcts, reaching a record high.
Profit Forecasts, Valuations, and Ratings
We adjusted the profit forecast according to the announcement. We expect the company's revenue for 2024-2026 to be 306.19/342.82/38.921 billion yuan, net profit to mother of 15.77/20.62/2,572 billion yuan, corresponding PE to 11/9/7X, maintaining a “buy” rating.
Risk warning
Demand for downstream real estate and infrastructure falls short of expectations, increased competition in overseas markets, risk of rising raw material prices, and risk of exchange rate fluctuations.