Increased profit margins led to a significant increase in performance in 23 years
Zhejiang Dingli achieved operating income of 6.31 billion yuan in 2023, an increase of 15.9% over the previous year; realized net profit of 1.87 billion yuan, an increase of 48.5% over the previous year; and earnings per share of 3.69 yuan. The net operating cash inflow was 2.23 billion yuan, an increase of 137.8% over the previous year. The company's gross margin in 2023 was 38.5%, an increase of 7.5 percentage points over the previous year. The main reasons are: 1) the company has increased its cost control efforts, continuously improved production efficiency through lean management and process upgrades, and actively exploited the advantages of intelligent manufacturing on a large scale; 2) product structure optimization, electrification and an increase in the proportion of differentiated products with high added value; 3) the reduction in raw material costs. The net interest rate was 29.6%, up 6.5 percentage points year over year. The company plans to pay a dividend of 1.00 yuan per share, with a dividend rate of 27%.
In 24Q1, the company achieved operating income of 1.45 billion yuan, an increase of 11.5%; net profit to mother of 30 billion yuan, a year-on-year decrease of 5.4%; earnings per share of 0.60 yuan; and a net operating cash inflow of 118 million yuan. Gross margin was 41.1%, up 3.5 percentage points year on year; net margin was 20.8%, down 3.7 percentage points year on year.
Domestic and foreign business revenue grew steadily. In 2023, the sales performance of arm products was outstanding. In 2023, the company achieved overseas market revenue of 3.84 billion yuan, an increase of 13.4%; domestic market revenue was 2.12 billion yuan, an increase of 15.2% over the previous year. The steady growth in performance is mainly due to the company's active development of domestic and foreign markets, and high-quality and differentiated products have been recognized by the market. In 2023, the company's arm aerial work platform's revenue was 2.45 billion yuan, up 68.2% year on year. Among them, revenue from overseas arm products increased 141.3% year on year, showing impressive performance. The main reason was that the company increased sales of arm products, especially the smooth promotion of arm products in overseas markets.
The product line continues to innovate and improve, leading the digital intelligent development of the industry. The company has taken the lead in electrifying a full range of products. It is the first manufacturer in the world to achieve a series of high-meter, high-load, and modular electric arm products. The company has a “future factory” project with a leading degree of intelligence and automation in the global industry - a “large-scale intelligent aerial work platform construction project with an annual output of 4,000 units”. The project widely uses big data, Internet of Things, artificial intelligence and other technologies to achieve digital design, flexible production, and intelligent management; the project has now entered the trial production stage. The company continues to increase R&D investment. The R&D expenses in 2023 were 220 million yuan, an increase of 8.7% over the previous year.
Maintain an “increase in holdings” rating
The company's profit margin increased rapidly. As a result, we raised the company's 24-25 net profit forecast of 24.1%/26.1% to 21.5/2.53 billion yuan, and introduced the 26-year net profit forecast of 2.94 billion yuan, corresponding to 24-26 EPS of 4.25/4.99/5.81 yuan, respectively. The aerial work platform market has broad room for growth. The company's product delivery volume continues to grow, overseas markets are being developed rapidly, profit margins are expected to continue to increase, and maintain the “gain” rating.
Risk warning: risk of increased industry competition, risk of fluctuations in raw material prices, risk of exchange rate fluctuations, risk of US “double reverse” investigation