Zoomlion(SZ:000157) Guotou Securities·2024-09-30 10:03Investment Rating - The investment rating for the company is "Buy - A" with a 12-month target price of 8.82 CNY, compared to the current stock price of 7.58 CNY [6]. Core Insights - The company is positioned as a leading player in the engineering machinery industry, leveraging a mixed ownership structure to enhance its governance and operational efficiency. The innovative "end-to-end" direct sales model has been pivotal in driving growth in both domestic and international markets [2][3][4][5]. Summary by Sections 1. Top-Level Structure - The company completed its mixed ownership reform in 2012, establishing a diversified equity structure that includes state-owned, foreign, management, and strategic investors. As of mid-2024, the Hunan Provincial State-owned Assets Supervision and Administration Commission holds 14.48% of the shares, while management and employees collectively own 20.25% [3][44]. - The board of directors is balanced, comprising representatives from management, state capital, strategic investors, and independent directors, which fosters a modern governance mechanism that aligns the interests of various stakeholders [3][50]. 2. Business Model - The company has developed an "end-to-end, digital, localized" direct sales system, initially implemented in the domestic market and later adapted for international markets. This model has facilitated direct connections between headquarters and customers, leading to improved profitability and asset quality [4][5]. - In 2023, the gross margin for overseas business reached 32.23%, indicating strong profitability compared to industry peers. The sales expense ratio was 7.56%, reflecting controlled costs associated with the direct sales model [4]. 3. Business Landscape - The company has seen significant growth in its international operations, with overseas revenue increasing from 3.83 billion CNY in 2020 to 17.905 billion CNY in 2023, representing a CAGR of 67.18%. In the first half of 2024, overseas revenue grew by 43.9%, accounting for 49.11% of total revenue [5][9]. - The company is actively expanding into emerging strategic businesses, including earth-moving machinery, aerial work platforms, agricultural machinery, and mining machinery, with notable revenue growth in these segments [9][10]. 4. Financial Forecast and Investment Recommendations - Revenue projections for 2024-2026 are estimated at 50.27 billion CNY, 58.56 billion CNY, and 68.70 billion CNY, with corresponding net profits of 4 billion CNY, 5.43 billion CNY, and 6.7 billion CNY. The expected growth rates for revenue and net profit are 6.8%, 16.5%, and 17.3% for revenue, and 14.2%, 35.7%, and 23.3% for net profit, respectively [9][10]. - The company is expected to benefit from a recovery in industry demand and the growth of its emerging business segments, supported by its direct sales model, which enhances its international market expansion capabilities [9][10].