The 23-year performance reached a record high, and the first quarter results fell short of expectations: the company achieved revenue of 20.077 billion yuan in 2023, up 30.5% year on year; comprehensive gross margin was 26.9%, up 3.5 percentage points year on year; net profit to mother was 1.929 billion yuan, up 15.9% year on year, and the performance reached a record high, mainly due to the continuous penetration of intelligent and electrified products into the market, driving a sharp increase in international sales revenue brought about by the continuous increase in internationalization. In the first quarter of 2024, the company achieved revenue of RMB 5.129 billion, down 5.7% year on year; comprehensive gross margin was 24.9%, up 0.5 percentage points year on year; net profit to mother was 486 million yuan, down 24.7% year on year. The first quarter results fell short of expectations, mainly due to the impact of the boom in the coal industry and the revenue of the mining equipment sector fell short of expectations.

The main business continued to grow: the competitiveness and market share of the company's core products increased further during the period. In 2023, the company's mining equipment sector achieved revenue of 11.8 billion yuan, an increase of 19% over the previous year. Among them, minecar sales have achieved significant growth, achieving operating income of 4 billion yuan, an increase of 38% over the previous year, and overseas minecart sales of 650 million yuan, an increase of 311% over the previous year. Currently, the company has become the largest mining vehicle supplier in China. The aftermarket business has achieved rapid growth, achieving sales of 1.58 billion yuan, an increase of 40% over the previous year, and gross margin of 39%, an increase of 2 percentage points over the previous year. The annual revenue of the logistics equipment sector was 5.8 billion yuan, an increase of 26% over the previous year. Front lift/forklift remained the number one brand. The gross margin of the front crane increased 6.2 percentage points to 39% year on year, and the gross margin of the forklift was 32%, up 7 percentage points year on year. In terms of overseas business, overseas sales in the logistics equipment sector experienced explosive growth, with sales reaching 3.55 billion yuan, up 69% year on year. Among them, Xiaogang Eki's sales increased 34% year on year, and the telescopic arm increased 260% year on year. At the same time, Dagang Motor's orders in 2023 reached 2.64 billion yuan, a record high. Among them, it successfully won PSA, HPH, and APMT orders totaling 700 million yuan. There are enough orders on hand.

Target price of HK$8.12, maintaining the purchase rating: Based on the development potential of the company's emerging equipment business and oil and gas business, sufficient on-hand orders in the mining equipment sector and logistics equipment sector and the advancement of the company's intelligent, internationalization, and electrification strategies, and the steady increase in the port market, we continue to be optimistic about the company's medium- to long-term development. We adjusted our revenue forecast for 24/25/26 to 26.848 billion/ 32.097 billion yuan/386.01 billion yuan; adjusted net profit forecast to mother of 2.93 billion/2,534 billion/ At $2,958 billion, the target price was adjusted to HK$8.12, corresponding to the 11-fold PE valuation center in 2024, maintaining the purchase rating.