Description of the event
In 2023, the company achieved revenue of 74.019 billion yuan, -8.44% year on year; realized net profit of 4.527 billion yuan, +5.53% year over year; realized net profit without deduction of 4.388 billion yuan, +40.35% year on year. 2023Q4 achieved revenue of 17.882 billion yuan, -17.58% year over year; realized net profit of 480 million yuan, or -30.74% year over year; realized net profit without deduction of 159 million yuan, +97.34% year on year. 2024Q1 achieved revenue of 17.830 billion yuan, -0.95% year over year; realized net profit of 1,580 billion yuan, +4.21% year over year; realized net profit without deduction of 1,346 billion yuan, -6.41% year on year.
Incident comments
The growth momentum of international business was good, and the 24Q1 decline narrowed markedly. The company's overseas sales revenue in '23 was 43.258 billion yuan, +18.28% year on year, accounting for 60.48% of main business revenue, +14.78pct year on year. By the end of '23, the company's overseas products had been exported to more than 180 countries and regions. By region, Europe had the fastest year-on-year revenue growth rate of +38.0%, accounting for 38%; North America +6.8%, accounting for 18%; Asia and Australia +11.1%, accounting for 38%; and Africa +2.6% YoY, accounting for 7%. The company has comprehensively strengthened its overseas layout in terms of marketing channels, local operations, service systems, etc., and its overseas business continues to grow rapidly. As the domestic cycle continues to decline, 24Q1's revenue declined only slightly, or mainly due to exports.
Product competitiveness continues to increase, and the dominant product market position is stable. The market share of the company's leading products continued to increase in 23 years, with 13 leading products such as excavation machinery topping the domestic market share: 1) excavation machinery revenue of 27.636 billion yuan, ranking first in the domestic market for 13 consecutive years; 2) Concrete machinery revenue of 15.315 billion yuan, ranking first in the world, with sales volume of electric mixers +47% year-on-year, leading market share for three consecutive years; 3) Crane revenue of 13 billion yuan, overseas growth rate of 50% +, and a sharp increase in global market share; 4) Pavement machinery revenue of 2,485 billion yuan, paving machine market share + 30% + The domestic market is at the top, and the market share of rollers and graders has risen sharply. 5) Piling machinery revenue is 2,085 billion yuan, and the domestic market share of rotary drilling rigs is 40% +, ranking first in the country.
Profitability has improved markedly, and the quality of operations has been continuously consolidated. The company's gross margin in '23 was +3.69 pct to 27.71% year on year, and net margin was +0.79 pct to 6.29% year on year. The main benefits were: 1) Overseas gross margin was higher than domestic 7.74 pct, while overseas revenue accounted for +14.78 pct of main business revenue year on year, driving up profitability. 2) Through intelligent operation in '23, the company saved more than 100 million yuan in energy costs in energy costs during operation, effectively improving quality, reducing costs and increasing efficiency. The 24Q1 company's gross margin was +0.54 pct year on year, net margin was +0.41 pct year on year, and profitability continued to increase.
At the same time, the company's cash flow continued to improve, and the 24Q1 performance was particularly impressive.
Domestic sales of excavators improved by +9.3% year-on-year in March. CME estimates that domestic sales remained flat in April, and the probability that the domestic industry bottomed out and remained flat throughout the year. Many of the company's leading products have the highest domestic market share. If the industry bottoms out and recovers, the company is expected to fully benefit.
On the international side, the company's global layout continues to improve in quality. Overseas shares are expected to increase steadily in the future, combined cost reduction and efficiency improvements will continue to advance, and the company's performance and profitability are expected to rise. The company is expected to achieve net profit of 6.282 billion yuan and 8.255 billion yuan respectively in 2024-2025, corresponding to PE 23 times and 18 times, respectively, maintaining a “buy” rating.
Risk warning
1. Domestic demand recovery falls short of expectations;
2. Overseas business expansion falls short of expectations.