Incident: In 2023, the company achieved total revenue of 74.019 billion yuan, a year-on-year decrease of 8.44%; realized net profit to mother of 4.527 billion yuan, an increase of 5.53% over the previous year. In the first quarter of 2024, the company achieved total revenue of 17.83 billion yuan, a year-on-year decrease of 0.95%; realized net profit to mother of 1.58 billion yuan, an increase of 4.21% over the previous year.
The level of gross margin continues to rise, and the quality of operations is consolidated and steady. In 2023, the company's gross margin was 27.71%, up 3.69 percentage points year on year; net profit margin was 6.29%, up 0.79 percentage points year on year. In the first quarter of 2024, gross margin was 28.15%, up 0.55 percentage points year on year; net margin was 9.19%, up 0.41 percentage points year over year. The company's overseas share continues to rise, cost reduction and efficiency continue to advance, and profitability continues to improve. The net cash flow from operating activities in 2023 was 5.7 billion yuan, an increase of 39% over the previous year; the company received 78.276 billion yuan in cash from selling goods and providing services, with a repayment rate of 99.38%. The overdue rate of purchase value in the company's main business divisions is controlled at a low level, and the overall scale and quality of foreign payments are maintained at a good level.
The competitiveness of core products continues to increase. In 2023, the company achieved revenue of 276.36/153.15/12.999 billion yuan respectively, up -22.71%/1.55%/2.60% year-on-year, accounting for 37.34%/20.69%/17.56% of revenue; gross margin was 33.17%/22.33%/24.67%, respectively, up 5.27/0.56/8.9 percentage points year-on-year. The company's domestic excavator market has been the top sales champion for 13 consecutive years; concrete machinery has been the number one brand in the world, with sales of electric mixers rising 47% year on year, leading the market share for three consecutive years; the overseas growth rate of lifting machinery has exceeded 50%, and the global market share has risen sharply; the market share of paving machines has exceeded 30%, and the domestic share of rotary drilling rigs has risen sharply.
Overseas revenue accounts for 60%, and the global strategy is progressing steadily. In 2023, the company's overseas revenue was 43.258 billion yuan, up 18.28% year on year, and the share of overseas revenue increased to 60%; the gross margin of overseas business was 30.78%, 7.74pct higher than that of domestic business. In 2023, the company's business revenue in Asia and Australia/Europe/America/Africa was 165/162.5/75.8/2.92 billion yuan respectively, up 11.1%/37.97%/6.82%/2.56% year-on-year. The company's overseas channel layout has been gradually improved. In addition to Putzmeister's overseas channels, the company has established an overseas market channel system covering more than 400 overseas subsidiaries, joint ventures and excellent agents. The company maintains a stable market position in overseas exports of excavation machinery, lifting machinery and concrete machinery products.
Investment advice: The competitiveness of the company's core sector continues to increase, the internationalization strategy has achieved remarkable results, and profitability continues to increase. We expect the company's net profit to be 65.82/87.84/110.34 billion yuan in 2024-2026, respectively, and the corresponding PE is 20.78/15.57/12.40 times, respectively. Maintain the company's “gain” rating.
Risk warning: Investment in infrastructure and real estate falls short of expectations, irrational competition in the market, deterioration in the overseas trade environment, poor performance, etc.