The company released the 2023 Annual Report & 2024 Quarterly Report, which is in line with expectations as a whole!
2023:1) The company achieved revenue of 74.019 billion yuan, -8.44% year on year; net profit to mother of 4.527 billion yuan, +5.53% year over year; net profit after deducting non-return to mother of 4.388 billion yuan, +40.35% year on year. 2) Gross profit margin 27.71%, +3.69pct year on year; net profit margin 6.29%, +0.79pct year on year; deducted non-net interest rate 5.93%, +2.06pct year on year. 3) The cost ratio for the period was 19.28%, +0.02pct year on year, and the sales/management/R&D/finance expenses ratio was 8.4%/3.58%/7.92%/-0.63%, respectively, and +0.6/+0.32/-0.64/-0.26pct, respectively.
2024Q1:1) The company achieved revenue of 17.83 billion yuan, -0.95% year on year; net profit of 1.58 billion yuan, +4.21% year on year; net profit without return to mother of 1,346 billion yuan, -6.41% year on year. 2) Q1 gross profit margin of 28.15% in a single quarter, +0.55pct year on year, +2.92pct month on month; net profit margin 9.19%, +0.41pct year on year, +6.6pct month on month. 3) The cost ratio for the period was 19.62%, +1.08pct, and the sales/management/R&D/finance expenses ratio was 7.74%/3.76%/7.25%/0.87%, respectively, +0.51/-0.25/-0.57/ +1.39pct, respectively.
By product: Concrete machinery/excavation machinery/hoisting machinery/pile machinery/pavement machinery achieved revenue of 153.15/276.36/130.0/20.85/2,485 billion yuan, yoy +1.55%/-22.71%/+2.6%/-31.97%/-19.32%; gross margins were 22.33%/33.17%/24.67%/34.08%/30%, yoy+0.56pct/+5.27pct/+8.9pct/- 2.38pct/+7.69pct.
Looking at the subregion: domestic revenue in '23 was 28.26 billion yuan, yoy -31.97%, international revenue was 43.26 billion yuan, yoy +18.28%; gross margins were 23.04%/30.78%, yoy+1.07pct/+4.42pct, respectively. Major global markets achieved rapid growth, with international revenue accounting for more than 60% of the main business in '23. Among them, Asia and Australia/ Europe/ America/ Africa achieved revenue of 165/162.5/75.8/2.92 billion yuan, yoy +11.1%/+37.97%/+6.82%/+2.56%, respectively.
The sales repayment situation is good, and the operating risk is effectively controlled: in '23, the company received 78.276 billion yuan in cash from selling goods and services, with a repayment rate of 99.38%, and the repayment level is relatively good; at the same time, adhering to the value sales policy, the overdue rate rate of the purchase value of all major product divisions is still kept at a low level, and the overall scale and quality of foreign payments are maintained at a good level.
The industry is expected to bottom up in 24, and the company, as a leader, is expected to benefit from it: China's construction machinery industry was still bottoming out in '23, but the decline narrowed markedly; while the construction machinery export business continued to grow, driven by favorable factors such as increased investment in overseas infrastructure and mining. Looking at 24, large-scale equipment renewal policies may boost market recovery, develop new quality productivity, and respond to the “double carbon” policy, etc., all of which are beneficial to industry development. At the same time, there is still plenty of room for global development of construction machinery. We believe that in 24, China is expected to build a foundation and superimpose global development, and the company's high-quality development is expected to help excellent performance.
Profit forecast: Considering the impact of factors such as the recovery process of the domestic construction machinery industry, we adjusted the profit forecast. The company's net profit for 2024-2026 is 60.4/72.3/9.02 billion yuan, respectively (the value before 24-25 was 6.55/ 9.34 billion yuan, respectively), and the corresponding PE is 22.9/19.1/15.4X, respectively, maintaining a “buy” rating.
Risk warning: policy risk, market risk, exchange rate risk, raw material price fluctuation risk, company international market operation risk, etc.