Tianfeng Securities·2024-09-18 11:10Investment Rating - The report maintains a "Buy" rating for the company, with a target price not specified [5]. Core Insights - The company, established in 1992 and incubated by a national research institute, is a leading player in high-tech equipment manufacturing, focusing on engineering and agricultural machinery. In 2023, the company experienced a rebound in performance, with revenue and net profit attributable to shareholders increasing by 13.08% and 52.04% year-on-year, respectively [1][21]. - The domestic engineering machinery industry is expected to enter an upward cycle after a period of decline, driven by equipment replacement demand and policy support for large-scale equipment updates. The domestic market is projected to recover, with a forecasted market size of $19.2 billion by 2027, growing at a CAGR of 19.73% from 2024 to 2027 [2][36]. - The company is actively expanding its overseas market presence, which has become a significant growth driver. The overseas market's gross profit margin is notably higher than that of the domestic market, indicating substantial profit potential [2][40]. Summary by Sections 1. Company Background and Performance - The company is the first in the industry to be listed on both A and H shares, with a clear product structure that includes main products and comprehensive derivative services. It has a robust performance recovery in 2023, with total revenue reaching 47.07 billion yuan [1][11][21]. - The company’s main business segments include engineering machinery, agricultural machinery, and financial services, with engineering machinery accounting for 85.49% of total revenue in 2023 [23]. 2. Domestic Industry Recovery and Overseas Expansion - The domestic engineering machinery market is showing signs of recovery, with significant growth in mining and water conservancy investments, which are expected to drive demand for excavators [30][36]. - The company has successfully expanded its overseas market, with exports to countries along the Belt and Road Initiative reaching $21.055 billion in 2023, a year-on-year increase of 24.1% [40][42]. 3. Technological Empowerment and Product Development - The company leverages its research and innovation capabilities to enhance product offerings and has established a direct sales system to support localized development in overseas markets [3][19]. - The company is focusing on emerging product categories, such as high-altitude machinery and agricultural machinery, which are expected to contribute to revenue growth [3][19]. 4. Financial Forecast - The company is projected to achieve revenues of 52.11 billion yuan, 61.94 billion yuan, and 74.14 billion yuan for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 11%, 19%, and 20% [4][21]. - Net profit attributable to shareholders is expected to reach 4.38 billion yuan, 5.53 billion yuan, and 6.69 billion yuan for the same years, with growth rates of 25%, 26%, and 21% [4][21].