投资建议：公司系国内工程机械龙头企业，出口和新兴业务快速增长。由于内销复苏不及预期，考虑到资产减值和股权激励费用，下调2024-2026 年EPS 为0.46、0.60、0.74 元（原0.59、0.72、0.87元）。考虑到公司目标价对应的2024 年PE 为18.97 倍，仍低于可比公司的PE 均值20.61 倍，维持目标价8.82 元，维持增持评级。Introduction to this report:
As a leading construction machinery company, domestic sales are expected to recover with policies such as real estate infrastructure and equipment trade-in, internationalization continues to advance, emerging businesses grow rapidly, and future performance can be expected.
Key points of investment:
Investment advice: The company is a leading domestic construction machinery enterprise, and exports and emerging businesses are growing rapidly. As the recovery in domestic sales fell short of expectations, the 2024-2026 EPS was reduced by 0.46, 0.60, and 0.74 yuan (previously 0.59, 0.72, 0.87 yuan), taking into account asset impairment and equity incentive expenses. Considering that the 2024 PE corresponding to the company's target price is 18.97 times, it is still 20.61 times lower than the average PE value of comparable companies, maintaining the target price of 8.82 yuan, and maintaining an increase in holdings rating.
The performance was in line with expectations. In the first three quarters of 2024, the company achieved revenue of 34.39 billion yuan/ -3.18%, and achieved revenue of 9.85 billion yuan/ -13.9% in a single quarter in Q3. Mainly due to relatively weak domestic sales, the company's relatively high revenue for cranes and concrete equipment declined, and export sales continued to grow rapidly. Net profit to mother was 3.14 billion yuan/ +10.0% in the first three quarters of 2024; net profit to mother was 0.85 billion yuan/ +4.4% in the Q3 quarter. Net profit to mother increased 29.5% year on year after excluding equity incentive expenses, mainly due to the year-on-year increase in gross margin and the year-on-year decrease in the cost ratio after excluding equity incentive expenses.
Profitability continues to improve, and asset quality has improved markedly. The gross margin for the 2024 Q3 quarter was 28.5% /+1.0pct, mainly due to the increase in overseas revenue share, which accounts for a relatively high gross margin, and the decline in raw material prices. The company's net profit margin for the 2024 Q3 quarter was 8.6% /+1.5pct, mainly due to the increase in the company's gross margin. The quality of the company's assets improved markedly. Accounts receivable decreased by 8.76% compared to the end of the first quarter, operating cash flow increased 81.57% year-on-year in Q3, the comprehensive repayment rate was 111% /+10.7pct, and the balance ratio was 53.25%, down 1.5 pct from the beginning of the year.
The company announced on October 17 that it plans to repurchase no more than 10% of the H shares. All repurchased shares will be cancelled, which is expected to increase earnings per share and enhance investor returns.
Internationalization continues to advance, and emerging businesses are growing rapidly. The company continues to promote an “end-to-end, digitized, and localized” overseas direct sales system, laid out outlets, and continued to promote the expansion and upgrading of overseas R&D and manufacturing bases. Overseas revenue grew rapidly. 24H1 overseas revenue increased 43.9% year-on-year, and Latin America, Africa, India, Europe and the United States continued to grow rapidly, accounting for the company's overseas revenue share. The growth rate in the Middle East, Southeast Asia and Central Asia also exceeded the industry average. The company's three traditional dominant products, such as concrete, construction cranes, and construction cranes, have strengthened their value sales strategy, and their market position is stable; emerging businesses such as earthmoving machinery, high machinery, and agricultural machinery are developing rapidly. 2024H1 growth rates are 19%, 17%, and 112%, respectively, contributing to the increase in performance.
Risk warning: Domestic demand falls short of expectations, and overseas market expansion falls short of expectations.
