occurrences

The company released its 2024 three-quarter report. In 2024Q1-3, the company achieved revenue of 34.386 billion yuan, a year-on-year decrease of 3.18%; net profit to mother was 3.139 billion yuan, an increase of 9.95% year-on-year. The company achieved revenue of 9.85 billion yuan in 2024Q3, a decrease of 13.89%; realized net profit to mother of 0.851 billion yuan, an increase of 4.42% over the previous year.

Stock payment fees have an impact on the company's net profit

The share payment fee had a certain impact on the company's net profit. The share payment fee for 2024Q1-3 company was 0.722 billion yuan, of which the 2024Q3 company's share payment fee was 0.241 billion yuan. After the share payment fee was added, the net profit of 2024Q1-3 company was 3.861 billion yuan, and the net profit of 2024Q3 to mother was 1.092 billion yuan.

The company has achieved remarkable results in reducing accounts receivable and inventory

The company achieved remarkable results in reducing accounts receivable. The total amount of 2024Q1-3 company's notes receivable+accounts receivable financing+loan and advances+long-term receivables was 41.477 billion yuan, a decrease of 2.278 billion yuan from the beginning of 2024, a decrease of 5.21%. At the end of the third quarter, the company's inventory decreased by 1.9 billion compared to the end of the first quarter, a decrease of 7.81%; of these, the 2024Q3 company's inventory decreased by 1.423 billion month-on-month, a decrease of 5.97%, further showing the effect of the company's inventory pressure drop.

The company's net interest rate increased, and profitability increased

2024Q1-3's gross margin/net margin was 28.37%/10.16%, respectively, +0.61/+1.54pcts year-on-year, respectively.

Among them, 2024Q3's gross margin/net margin was 28.52%/9.65%, respectively, +1.06/2.28 pcts year-on-year, respectively.

2024Q3's sales expense rate/ management expense rate/ R&D expense rate/ financial expense ratio were 8.76%/5.57%/-1.43%, respectively, compared with +1.11/+2.04/-2.99/ -1.01pcts, respectively. We believe that the increase in the company's gross margin was due to the company's compression of products with high resource consumption and low gross profit, while the company's share of overseas business continued to increase, while the reduction in R&D expense ratio and financial expense ratio increased the company's net profit margin.

The operating capacity of leading construction machinery companies is stable, maintaining the “purchase” rating of the domestic construction machinery industry. We are optimistic that domestic demand will continue to grow, and there is still room for growth in overseas markets. We are optimistic about the company's earthmoving machinery and agricultural machinery products. We expect the company's revenue for 2024-2026 to be 52.662/59.871/68.326 billion yuan, respectively, and net profit to mother will be 4.475/5.224/6.287 billion yuan, respectively, with a CAGR of 21.49%. EPS is 0.52/0.60/0.72 yuan/share respectively. Considering that the boom in the domestic construction machinery industry is expected to gradually pick up; diversified products are expected to increase the company's overseas business and maintain a “buy” rating.

Risk warning: The macro environment falls short of the expected risks, and overseas expansion falls short of the expected risks