A private model for the Chinese bus industry, a leading Baima leader with long-term investment value: Yutong Bus is a private benchmark in the Chinese bus industry. After more than 60 years of self-innovation, it has a rich corporate culture and brand heritage. The company continues to focus on R&D and innovation, forward-looking layout of new energy sources and international markets, and actively seizing low-carbon development opportunities for global public travel. The company has always attached importance to shareholder returns and is committed to establishing a long-term stable dividend mechanism. Since its listing, it has accumulated cash dividends of 23.8 billion yuan, with a dividend rate of 75%, showing strong long-term investment value attributes.

Going overseas has begun a new growth cycle, and there is plenty of room for new energy growth: China's annual demand for buses exceeds 0.4 million vehicles, of which large and medium buses account for more than 30%. Large and Chinese customers account for nearly 40% of exports, and it has become one of the main sources of demand. Overseas demand is around 0.25 million vehicles, developed regions are stable, developing regions continue to expand, and new energy sources bring structural growth opportunities. In the past, China's share of overseas markets was about 10%, and the share of new energy sources exceeded 40%. In recent years, with the surge in demand for new energy sources, China's overall overseas market share has increased to 14%. It is expected to continue to grow in the future, unleashing export potential. The average export price of new energy buses is nearly three times that of traditional fuel vehicles, and exports are expected to continue the sharp rise in volume and price.

The market share remains absolutely leading, and the quadruple advantage has built a deep moat: the company is significantly ahead in terms of market share, domestic passenger car share exceeds 50%, exports exceed 20%, new energy export share continues to increase, and Europe's contribution is increasing effectively. We believe that the company's competitive advantage mainly comes from: 1) leading sales team size and accelerated expansion of overseas channels; 2) high R&D investment, full market segmentation, and continuous brand upgrading; 3) accelerated depreciation of fixed assets, gradual inflection point of expenses, overall industry chain layout, superposition in Henan, with significant advantages in manpower and transportation costs; 4) In the past, many equity incentives are closely tied to the interests of the company, and the high proportion of dividends is expected to continue.

The year-end catalyst is approaching, the growth logic is clear, and high dividends increase allocation appeal: In the short term, domestic trade-in policies promote the release of demand for new energy buses, and new energy export orders continue to be strong. Export performance is expected to be good at the end of the year, and the share of new energy is expected to increase significantly in the fourth quarter. In the medium to long term, domestic structural optimization and high-end technology continue to advance, and there is plenty of room for overseas new energy growth. As the world's leading new energy bus company, the company is expected to fully enjoy the dividends of the industry. Against the backdrop of increased profits and low capital expenditure, high dividends are expected to continue. The current dividend rate exceeds 8.0%, which is the target of scarce dividends.

Profit forecast: In 2024-2026, the company is expected to achieve revenue of 33.94, 39.58, 44.04 billion yuan, and net profit of 3.43, 4.19, and 4.77 billion yuan to mother, maintaining the “recommended” rating.

Risk warning: Increased industry competition; fluctuating raw material prices; risk of trade barriers such as tariffs.