Key points of investment:

The company's 24Q3 net profit was 0.636 billion yuan, +38% year over year. The company disclosed the 2024 three-quarter report: 1) 2024Q1-Q3 achieved operating income of 6.134 billion yuan, +29.35% year over year; net profit to mother was 1.46 billion yuan, +12.91% year over year; net profit without return to mother was 1.482 billion yuan, +19.42% year over year. 2) In a single quarter of 2024Q3, revenue was 2.274 billion yuan, +38.37% year over year; net profit to mother was 0.636 billion yuan, +37.72% year over year; net profit after deducting non-return to mother was 0.62 billion yuan, +45.26% year over year.

The gross margin for the third quarter decreased by 6.23 pct year on year, but increased by 5.79 pct ① profit level: 2024Q1-Q3's gross sales margin/ net sales margin was 36.2%/23.8%, respectively, with a year-on-year change of -1.51pct/-3.45pct; 2024Q3 gross margin/net margin for a single quarter was 37.6%/28.0%, respectively, -6.23pct/-0.09pct, +5.79pct month-on-month.

② Expense rate level: The cost rate during 2024Q1-Q3 was 6.46%, with a year-on-year change of +0.39pct.

Among them, the sales/management/R&D/finance expense ratios were 2.24%/2.32%/2.94%/-1.04%, respectively, with year-on-year changes of -1.84/+0.21/-0.20/+2.22pct. The cost rate for the 24Q3 period was 6.08%, a year-on-year change of -7.33pct. Among them, the sales/management/ R&D/ financial expense ratios were 2.55%/2.40%/2.72%/-1.59%, year-on-year change -3.29/+0.93/+0.39/ -5.36pct, and month-on-month change +1.55/-0.06/-0.10/-1.18pct.

Exports of aerial work platforms increased 19.0% in July-September, and cumulative exports increased 21.3% from January to September, according to statistics from the China Construction Machinery Industry Association on major manufacturers of lift work platforms:

From July to September 2024, 43,371 lift work platforms were sold, down 12.7% year on year; 19,252 units were in China, down 34.5% year on year; 24,119 units were exported, up 19.0% year on year.

From January to September 2024, a total of 14,4820 lift work platforms were sold, a year-on-year decrease of 14.5%; in China, 72,466 units were sold, a year-on-year decrease of 33.9%; and 72,354 units were exported, an increase of 21.3% over the previous year.

Profit forecasting and investment advice

We expect the company's 2024-2026 revenue CAGR to be 17%, net profit CAGR to mother of 20%, and revenue of 8.023, 9.704, and 11.023 billion yuan (previous values were 77.47, 92.78, and 109.14, respectively. The revenue growth rate for the first three quarters exceeded expectations, so the annual revenue forecast was raised) and net profit to mother is 2.083, 2.508, and 3.001 billion yuan, respectively (previous values were 2.134, 2.535, and 3.035 billion yuan, top three Quarterly gross margin declined, so the annual gross margin level was lowered). EPS was 4.1 yuan, 5.0 yuan, and 5.9 yuan, respectively, corresponding to PE 12, 10, and 8 times. Zhejiang Dingli is the world's leading manufacturer of aerial work platforms. It has strong technical strength, continuous product structure optimization, benefiting from the high boom in overseas markets, and the brand's recognition overseas is constantly increasing, so we believe that the company has a value-for-cost ratio and maintains a “buy” rating.

Risk warning

Risk of fluctuations in raw material prices; risk of increased industry competition, risk of exchange rate fluctuations, etc.