ZPMC(SH:600320) Hua Er Jie Jian Wen·2025-04-01 01:08Core Viewpoint - Zhenhua Heavy Industries reported a revenue of 33.456 billion yuan for 2024, marking a year-on-year growth of 4.62%, but net profit growth has significantly slowed down, indicating challenges in traditional manufacturing amidst technological upgrades and global changes [1][2]. Revenue and Profit Analysis - The company achieved record revenue and net profit in 2024, primarily driven by overseas market orders and domestic demand for upgrading old port equipment [2]. - Despite revenue growth, net profit only slightly increased by 2.6% to 534 million yuan, a sharp decline from the previous year's growth of 39.8% [1]. - The gross profit margin decreased by 0.76 percentage points to 12.76% in 2024, reflecting ongoing profitability challenges [1][7]. Business Segment Performance - The revenue structure includes port machinery, offshore engineering equipment, and steel structure businesses, with port machinery being the core segment [3]. - Port machinery revenue was 20.594 billion yuan, accounting for 59.77% of total revenue, but experienced a year-on-year decline of 3.03%, marking the first negative growth in three years [3]. - Offshore engineering equipment revenue surged by 52.92% to 8.293 billion yuan, driven by a 120% increase in offshore wind installation vessel orders [3]. - The steel structure business generated 3.342 billion yuan, with a drastic drop in gross margin to 1.45%, significantly impacting overall profitability [3]. Quarterly Performance Trends - The company's performance showed a clear trend of high growth in the first half of the year, with a 28.49% year-on-year revenue increase, followed by a sharp decline in the second half, particularly in Q4 [4]. - In Q4, revenue fell to 9.094 billion yuan, a 12.74% year-on-year decrease, with net profit dropping by 49.76% [4]. - The delay in revenue recognition from major projects, such as the Saudi NEOM project, highlighted the company's reliance on large overseas projects [4]. Cash Flow and Financial Health - Operating cash flow reached 5.276 billion yuan, a modest increase of 1.77% year-on-year, but accounts receivable issues remain a concern [4][5]. - As of the end of 2024, accounts receivable stood at 7.366 billion yuan, representing 1379.40% of net profit, indicating a long collection cycle [4]. - The company maintained a high debt ratio of 78.64%, with interest-bearing debt of 28.546 billion yuan, over 40% of which is short-term debt, indicating significant repayment pressure [5]. Research and Development Investment - Zhenhua Heavy Industries increased R&D investment to 1.502 billion yuan in 2024, a 14.55% year-on-year growth, with R&D accounting for 4.36% of revenue, the highest in five years [7]. - The company aims to enhance its technological capabilities in green and intelligent transformation, aligning with national policy directions [8]. - Despite high R&D spending, the gross margin decreased, suggesting challenges in cost control and profitability [7]. Future Outlook - The company plans to focus on deep-sea economy and digital transformation, aiming to enhance the intelligence of port machinery and the high-end nature of offshore equipment [8]. - The ability to seize opportunities in global port automation and deep-sea resource development will be crucial for valuation reconstruction [9].