XCMG(SZ:000425)2024-09-09 03:35Investment Rating - The report assigns a "Recommended" rating for the company, XuGong Machinery [5]. Core Views - The company's performance meets expectations, with continuous optimization of profitability. In the first half of 2024, the company achieved revenue of 49.632 billion yuan, a year-on-year decline of 3.21%. The net profit attributable to shareholders was 3.706 billion yuan, a year-on-year increase of 3.24% [2][52]. - The company is enhancing its risk management and maintaining healthy cash flow, with off-balance-sheet risks decreasing significantly [2][3]. Summary by Sections Financial Performance - In H1 2024, the company reported revenue of 49.632 billion yuan, down 3.21% year-on-year, while Q2 revenue was 25.5 billion yuan, down 7.04% year-on-year but up 5.31% quarter-on-quarter. The net profit attributable to shareholders for H1 was 3.706 billion yuan, up 3.24% year-on-year, with a net profit margin of 7.47%, an increase of 0.47 percentage points [2][52]. - The gross margin for H1 2024 was 22.89%, slightly up by 0.03 percentage points year-on-year, with domestic gross margin at 21.69% (down 1 percentage point) and overseas gross margin at 24.41% (up 1.2 percentage points) [2][54]. Business Segments - The company’s traditional business segments, including cranes, earth-moving, and concrete machinery, saw revenue growth rates of -15%, +7%, and -3% respectively. The emerging businesses, such as high-end machinery and mining machinery, experienced revenue declines of -12% and -16% respectively due to overall weak industry demand [2][3]. - In H1 2024, domestic and international revenues were 27.7 billion yuan and 21.9 billion yuan, with year-on-year growth rates of -9% and +5%, respectively. The international revenue share increased by 4 percentage points to 44% compared to 2023 [2][3]. Risk Management and Cash Flow - The company has strengthened risk management, with off-balance-sheet risks decreasing by 4.4 billion yuan since the beginning of the year. The company’s credit impairment losses were 100 million yuan, a significant reduction from the previous year [2][3]. - Operating cash flow for H1 2024 was 1.7 billion yuan, an increase of 168 million yuan year-on-year, with a cash collection ratio of 3.44%, up 0.44 percentage points [2][3]. Profitability Forecast and Investment Suggestions - The report forecasts net profits of 6.4 billion yuan, 7.9 billion yuan, and 9.5 billion yuan for 2024, 2025, and 2026, respectively, with corresponding PE ratios of 12, 9, and 8 times [3][57].