Brief performance review
On April 25, 2025, the company released its annual report for the year 24 and the quarterly report for the year 25. It achieved operating income of 51.697 billion yuan in 24, an increase of 14.62% over the previous year, and achieved net profit of 1.391 billion yuan to mother, an increase of 78.43% over the previous year. 1Q25 achieved operating income of 12.311 billion yuan, a year-on-year increase of 7.98%, and realized net profit to mother of 0.396 billion yuan, an increase of 348.96% year-on-year.
Management analysis
Benefiting from the continuous upward trend in the ship cycle, the company's diesel power business revenue increased. Benefiting from the continued upward trend in the shipbuilding cycle, the company's shipbuilding and marine industry maintained a high level of prosperity. The completion rate of the company's annual revenue plan for 2024 reached 127.10%, and the annual plan completion rate for newly signed contracts reached 141.56%. Among them, in the marine low-speed diesel engine business, in 2024, the company optimized its order acceptance strategy and gave priority to receiving high-efficiency and high-quality orders. The gross margin of new low-speed engine orders increased by 4 percentage points over the same period last year. In terms of order delivery, the company produced 485 low-speed marine diesel engines in 2024, an increase of 20.35% over the previous year. In 2024, the company achieved revenue of 22.874 billion yuan from the diesel power business, an increase of 32.87% over the previous year, and maintained a high growth rate.
The diesel engine maintenance network has been successfully built, and aftermarket revenue has increased rapidly in 24 years. According to the company's announcement, in 2024, the company's diesel engine after-sales service capacity continued to improve. It successfully won a bid for a designated maintenance service unit in China for 2024 equipment and completed the construction of a central warehouse in the Shanghai Free Trade Zone; signed service agreements with more than 10 partners overseas to complete the construction of an overseas warehouse in Amsterdam, and overseas service capacity was continuously improved; a global service system was initially established, forming a “1+8+20” global service network layout. The annual diesel engine after-sales service revenue was nearly 1.5 billion yuan, an increase of nearly 25% over the previous year.
Dual fuel technology continues to break through, and I am optimistic that the company's ability to take orders will improve in the future. In recent years, the company has continuously made new breakthroughs in low-speed diesel engine technology for dual-fuel ships. According to the company's announcement, in 2024, the company completed the full load test of the world's first 10X92DF-M-LPSCR methanol dual-fuel engine, completed the ignition test of the first domestic self-developed methanol fuel low speed testing machine, and completed the development of the world's first 6G70ME-C10.5-LGIA-HPSCR ammonia dual-fuel marine low speed engine. In 2024, the company's share of low-carbon, zero-carbon mainframe orders increased by 5 percentage points year-on-year, and achieved batch orders for low speed ammonia-fueled engines. With the improvement of dual-fuel technology, I am optimistic that the company's ability to take orders will continue to improve in the future.
Profit forecasting, valuation and ratings
We expect the company's revenue to be 58.8/66.7/75.7 billion yuan in 2025-2027, net profit to mother of 2.3/3.3/4.5 billion yuan, corresponding PE of 20/14/10X, maintaining a “buy” rating.
Risk Alerts
Raw material price fluctuations, RMB exchange rate fluctuations, growth of new orders falling short of expectations, and lower implementation of carbon emission reduction policies than expected risks
