Incidents:
The company achieved revenue of 74.019 billion yuan in 2023, 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. The company achieved revenue of 17.662 billion yuan in 2024Q1, a year-on-year decrease of 0.73%; realized net profit to mother of 1.58 billion yuan, an increase of 4.21% over the previous year.
The company's overseas business maintained rapid growth in 2023
By product, the company's concrete machinery/excavation machinery/lifting machinery/pile machinery/pavement machinery/others earned 153.15/276.36/129.99/20.85/24.85/11.01 billion yuan respectively, +1.55%/-22.71%/+2.60%/-31.97%/-19.32%/+29.96%, respectively. By region, the company's domestic/international business achieved revenue of 282.64/43.258 billion yuan respectively, or -31.97%/18.28% year-on-year, respectively.
In 2023, the company's excavators were the top domestic sales; concrete machinery ranked first in the world, and sales of electric mixers increased 47% year on year; the overseas growth rate of lifting machinery was more than 50%, and the global market share increased. At the same time, the international market also achieved rapid growth, accounting for 60.48% of international revenue, an increase of 14.78 pcts over the previous year.
2024Q1's revenue has remained stable. Optimistic about equipment renewal requirements in the domestic market, the company achieved revenue of 17.662 billion yuan in 2024Q1, down 0.73% year on year; realized net profit of 1.58 billion yuan, up 4.21% year on year; realized net profit without return to mother of 1.35 billion yuan, down 6.41% year on year.
Overall, the company's 2024Q1 revenue has remained stable. We believe that since 2023, China's construction machinery industry is still bottoming out, but the decline has narrowed markedly. We believe that in 2024, as policies such as the “Action Plan to Promote Large-scale Equipment Renewal and Consumer Goods Trade-In” continue to advance, large-scale equipment updates will boost the recovery of the domestic market; overseas business is still expected to increase the company's performance.
The company's gross margin continued to grow, mainly due to changes in revenue structure, the company's gross margin/net margin was 27.71%/6.29%, respectively, +3.69/+0.79pcts; among them, concrete machinery/excavation machinery/lifting machinery/pile machinery/pavement machinery/other sectors gross margins were 22.33%/33.17%/24.67%/34.08%/30.00%/23.41%, respectively, +0.56/+5.27/+8.90/ -2.38/+7.69/+ 3.29pcts. 2024Q1's gross margin/net margin was 28.15%/9.19%, respectively, +0.55/+0.41pcts year-on-year. We believe that the increase in the company's gross margin is mainly due to changes in the company's revenue structure, and the increase in revenue share increases the company's overall gross profit margin.
Profit Forecasts, Valuations, and Ratings
We are optimistic about the company's domestic equipment updates and overseas market demand. We expect the company's revenue for 2024-2026 to be 821.2/930.7/104.82 billion yuan, respectively, and net profit to mother of 70.79/78.65/9.043 billion yuan, respectively, and a CAGR of 25.94%. EPS was 0.83/0.93/1.07 yuan/share respectively. We gave the company 22 times PE in 2024, maintain the target price of 18.48 yuan in 2024, and maintain the “buy” rating.
Risk warning: downstream demand falls short of expectations; overseas sales fall short of expectations, etc.