Incidents:
The company released its 2023 annual report. In 2023, the company achieved revenue of 1,352 billion yuan, an increase of 32.03% over the previous year, and achieved net profit of 206 million yuan, an increase of 183.05% over the previous year. The comments are as follows:
Operations have been improving steadily, and multiple factors have contributed to a significant increase in net profit. The company's revenue mainly comes from aerial work platforms and fire engines, which accounted for 40.46% and 33.03% of the company's revenue in 2023, respectively. According to Huicong Construction Machinery Network, the cumulative sales volume of aerial work platforms in China reached 4139 units in 2023, an increase of 23.44% over the previous year, and the industry is booming. The company's aerial work platform revenue in 2023 increased by 28.34% year-on-year, faster than the industry. The company's gross margin was relatively stable, and the significant increase in revenue showed a scale effect. In 2023, the company's sales expenses ratio and R&D expense ratio decreased by 0.82 pct and 0.60 pct respectively, and the management expenses ratio increased slightly by 0.22 pct, and the overall cost ratio declined during the period. In addition, in 2023, the company disposed of shares in its subsidiary Dongguan Haixun generated revenue of 51.3036 million yuan, which contributed greatly to profits.
Based on our core business, we continue to lay out new products. The company has a high share of the aerial work platform market, and is also the only car company in the industry that independently produces insulating arms. Insulated boom truck products are highly competitive and have a stable market position; its wholly-owned subsidiary Grumman is a “century-old store” in the fire protection industry, has equipment manufacturing and special vehicle production qualifications, and is technologically advanced. While establishing a basic market for the main business, the company continues to develop new products. In 2023, it launched 6 new emergency drainage products, including portable drainage trucks and hydraulic power drains. The self-developed AMR project's homemade automatic guided truck HAS40 was successfully launched in November 2023, and the Grumman high-altitude series drone fire fighting truck has also made breakthrough progress in research and development. Continued introduction of new products is expected to boost the company's performance.
Actively expand overseas markets and promote international and domestic two-wheel drive. China's aerial work platforms are mainly sold domestically. According to Huicong Construction Machinery Network, China exported 71 units of aerial work platforms in 2023, accounting for only 1.72% of total sales. Aerial work platforms are the category with the lowest share of export sales in the construction machinery industry, and the vast overseas market needs to be developed urgently. In 2023, the company established an international division, formed an international business team, comprehensively strengthened international market development, strengthened international market research, technical exchanges and product development, and quickly built an international marketing system through direct management, agency, and international cooperation. Two-wheel drive saw initial results.
Profit forecast: The company's net profit for 2024-2026 is estimated to be 2.73, 3.62, and 454 million yuan, respectively, with corresponding PE values of 16, 12, and 10 times, respectively, maintaining an “increase in holdings” rating.
Risk warning: New product promotion falls short of expectations; profit forecasting and valuation models fail