XCMG(SZ:000425) ZHONGTAI SECURITIES·2024-08-31 03:02Investment Rating - The investment rating for the company is "Buy" (maintained) [2][9]. Core Views - The company reported a slight decline in revenue for the first half of 2024, with a year-on-year decrease of 3.21%, but managed to achieve a net profit increase of 3.24% [6][7]. - The company is expected to benefit from the upcoming renewal cycle in the domestic excavator industry, with a projected natural replacement demand of 86,000, 103,000, and 146,000 units from 2023 to 2025 [8]. - The company's international revenue has increased, accounting for 44% of total revenue, with a year-on-year growth of 4.8% in the first half of 2024 [7][8]. Financial Summary - Total shares outstanding: 11,816 million shares [3]. - Market price: 6.29 CNY [3]. - Market capitalization: 74,324 million CNY [3]. - Revenue forecast for 2024 is 102,710 million CNY, with a year-on-year growth of 10.6% [5][11]. - Net profit forecast for 2024 is 68,200 million CNY, with a year-on-year growth of 28% [11]. Profitability Analysis - The gross profit margin for the first half of 2024 was 22.89%, a slight increase of 0.03 percentage points year-on-year [7]. - The company experienced a foreign exchange loss of 740 million CNY in the first half of 2024, compared to a gain of 948 million CNY in the same period of 2023 [7]. - Operating cash flow improved, with a net cash flow of 1,706 million CNY, a year-on-year increase of 11% [7]. Growth Potential - The company is increasing its R&D investment, which reached 2,461 million CNY in the first half of 2024, a year-on-year growth of 0.72% [7]. - The company has a comprehensive global layout with over 40 overseas subsidiaries and more than 300 overseas distributors, covering over 190 countries and regions [8]. Market Position - The company is positioned as a leading player in the engineering machinery sector, with a complete range of traditional and emerging products [9]. - The domestic excavator market has shown signs of recovery, with a 9% year-on-year increase in sales in March 2024 [8].