Key investment points

Dingli EU's final anti-dumping duty rate decreased by 7.7pct from the initial ruling. The overall impact is manageable. According to Access International, the European Commission has announced the anti-dumping duty rates for aerial work platforms exported from China: Xingbang, JLG, Jenie, and Dingli are 49.3%/22.9%/23.6%, respectively. The remaining companies cooperating with the investigation (including Lingong, Zhonglian, Xugong, Liugong, Hangcha, etc.) have tax rates of 30.2% compared to the preliminary ruling results, respectively /7.7/1.8pct Dingli's final ruling tax rate is significantly lower than that of domestic friends and merchants, and is comparable to that of North American leaders. We believe that the tax rate has limited impact on the company's actual export orders and profit levels for EU products: (1) When the industry is subject to general tariffs, price increases are a definite trend, and the company will pass on part of the costs to end customers. (2) The company's gross margin is significantly higher than that of its peers, and it is more able to withstand rising tariff costs. Also, with reference to North America, the industry's high tariffs may become a barrier, and its share is expected to increase.

Overseas arm volume+mergers and acquisitions have strengthened CMEC. Optimistic about the company's performance growth, we are optimistic about the sustainability of the company's performance growth: (1) the arm type has passed trial and verification with overseas customers to support performance growth; (2) the company basically completed the acquisition of the US CMEC in April 2024. CMEC is a local brand in the US. It has been deeply involved in the local market for many years. It already has a certain level of brand awareness and customer stickiness, and a mature sales team. Dingli's acquisition of CMEC is expected to gain more autonomy in the North American market, promote new products faster and expand the market through CMEC's brand and channels. Furthermore, subsequent North American “double reverse” tax cuts are also expected to increase corporate profits and enhance overall competitiveness.

It is planned to invest 1.7 billion yuan to build a new production base. The production capacity of new energy machines is expected to be further expanded. Currently, the company's Phase 5 factory is climbing. It mainly focuses on high-meter arm/scissor products. The planned output value is 3.8 billion yuan. In line with overseas promotion of arm products, performance growth is guaranteed for the next 3 years. On March 22, 2024, the company announced that it plans to use self-funded 1.7 billion yuan to invest in the construction of a new energy aerial work platform project with an annual output of 0.02 million units. The project is located in Leidian Town, Deqing County, Zhejiang Province. It is close to the current production capacity. The construction period is 3 years, and the post-delivery output value is about 2.5 billion yuan. Based on the average price of a single unit of 0.125 million yuan, we judge that the project is mainly a scissor lift. The new construction project is expected to take over the fifth phase of the plant, providing further support for the company's long-term growth.

Profit forecast and investment rating: Due to prudential considerations, we maintain the company's 2024-2026 net profit forecast of 2.2/2.6/3 billion yuan. The current market value corresponds to PE of 12/10/9 times, maintaining a “buy” rating.

Risk warning: increased market competition, geopolitical risks, etc.