Incident: The company released its 2024 three-quarter report. In the first three quarters of 2024, it achieved revenue of 5.149 billion yuan, net profit of 0.255 billion, +17.3%, gross profit margin 19.3%, +0.5pct year on year; 24Q3 achieved revenue of 1.999 billion, +3.5% year on month, +15.1% month on month, net profit of 0.081 billion, year over year, +37.5% month on month, gross profit margin 18.4%, year on year- 0.6pct, month-on-month ratio -1.4pct.

Performance review: The revenue scale for the first three quarters of 2024 reached a record high during the same period, mainly due to continuous fulfillment of orders in the material handling equipment sector. There was a month-on-month decline in results in the third quarter, mainly due to the fact that German Koch subsidiaries contributed more to the performance, which distributed profits and losses to minority shareholders more, and the overall management level was stable and improved.

The multi-point layout of the high-end equipment sector supports the rapid growth of the company's performance.

Material handling sector: Positioning the global market, full of on-hand orders and stable dynamics. In the domestic market, the company recently signed a “Strategic Cooperation Agreement” with Transport Machinery Group to carry out in-depth cooperation in the fields of port bulk material handling and transportation, mine bulk material handling and storage, etc., which is expected to lead to an increase in orders. In overseas markets, the company has established sales and after-sales service outlets in Southeast Asia, South America, India, Africa, Europe, Australia and other countries and regions. The market expansion work is good, and orders have been received one after another. Currently, the company maintains a large scale of orders, which continues to drive revenue growth.

Offshore sector: Seabreeze equipment and offshore vessels carry out dual lines, and complementary production capacity contributes to performance growth. On the one hand, the company has accelerated the development of the overseas single-pile foundation market. It has previously completed the export of the first batch of offshore wind power foundation pile projects to the Japanese market and passed the Japanese JIS certification review, which is expected to gradually open up overseas space. On the other hand, as ships ushered in a new boom cycle, offshore oil and gas development activities and the shipping market showed an active trend, driving an increase in demand for related ships and offshore communication. The company actively developed, and related orders were gradually implemented. Currently, the company has its own docks and platforms, and will independently allocate production capacity in terms of seabreeze infrastructure and offshore vessels in accordance with market changes to maximize profits.

Profit prediction and investment rating: High-end equipment sector, the company's multi-point layout accelerates the development of the global market, maintains a high level of on-hand orders, and ensures performance development. Furthermore, the environmental sector has performed well, the risk of impairment is low, and expectations of impairment have been narrowed. We expect the company to achieve net profit of 0.35/0.43/0.54 billion yuan respectively in 24-26, +534%/+23%/+24% over the same period last year. The current stock price corresponds to PE 13/11/9 times, respectively, to maintain a “buy” rating.

Risk warning: demand falls short of expectations; competition increases risk; orders cannot absorb expectations; risk of impairment of goodwill, etc.