Brief performance review
On August 28, the company released its report for the year 24, with 24H1 revenue of 49.632 billion yuan, -3.21%; net profit to mother of 3.706 billion yuan, +3.24% year over year; of these, single Q2 achieved revenue of 25.458 billion yuan, -7.31% year on year; net profit to mother 2.105 billion yuan, +1.89% year on year, net profit not returned to mother of 1.828 billion yuan, -11.69% year over year.
Management analysis
Continuing to promote the international market, 24H1 accounts for more than 40% of overseas revenue. According to the announcement, 24H1's international revenue was 21.9 billion yuan, 4.8%; international revenue accounted for 44%, +3.37pcts; by product, overseas revenue from excavators was +16%, and pump trucks and mixing plants doubled; from a regional perspective, the company's overseas production capacity in Brazil, Germany, Mexico, India, Uzbekistan, etc. was gradually improved to control costs from the supply chain side.
The gross margin of the overseas market reached 24.41% (2.72 pcts higher than the domestic market), +1.22pcts year on year. The increase in the share of overseas revenue is expected to drive the company's overall profit margin to continue to increase. The company's net profit margin is expected to be 7.0/8.3/ 9.4% in 24-26.
Asset quality has improved, and inventory and cash flow have improved. 24H1's operating cash flow was 1.706 billion yuan (yoy +11%), which exceeded the profit growth rate; in addition, the company's 24H1 balance ratio was 63.27% (YoY, 4.18pcts), and inventory was 30.217 billion yuan, -4.483 billion yuan year on year; the company's overall asset quality improved.
Focus on the high-end market, and open up a new curve with new energy and large tonnage products. 24H1's high-end products account for more than 32% of revenue (+4pcts year on year), and the revenue growth rate is over 10%. High-end products are mainly new energy products and high-horsepower products: 1) New energy: 24H1's new energy loader revenue increased 2 times year on year, and sales volume stabilized first in the industry; new energy forklifts +80.6% year over year, and new energy products are progressing smoothly; 2) Large tonnage products: 24H1's all-terrain cranes above 100 tons increased +30% year over year; the revenue of mining vehicles above 100 tons increased by 12.8 pcts compared to last year. High-end products are progressing smoothly.
Profit Forecasts, Valuations, and Ratings
We expect the company's revenue for 2024-2026 to be 96.584/106.299/118.582 billion yuan, net profit to mother of 6.781/8.824/11.172 billion yuan, corresponding PE is 12/9/7X, maintaining a “buy” rating.
Risk warning
Demand for downstream real estate and infrastructure falls short of expectations, increased competition in overseas markets, risk of rising raw material prices, and risk of exchange rate fluctuations.