XCMG(SZ:000425) Huaan Securities·2024-10-07 03:30Investment Rating - The report gives a "Buy" rating for the company [1][2]. Core Views - The company has established itself as a leader in the engineering machinery industry, with multiple products holding leading positions both globally and domestically [1][8]. - The engineering machinery industry is expected to stabilize and recover in 2024, driven by domestic demand and continuous growth in overseas markets [1][21]. - Emerging businesses and international markets present significant growth opportunities for the company [1][21]. Summary by Sections Company Overview - Founded in 1996 in Xuzhou, Jiangsu, the company has grown to become a leading enterprise in China's engineering machinery sector, with a diverse product range [1][8]. - The company has maintained a strong market position, with various products ranking first in China and among the top globally [1][8]. Industry Outlook - The engineering machinery industry has been in a downturn since 2021, but is expected to stabilize and recover in 2024 due to infrastructure projects and equipment upgrades [1][21]. - Domestic excavator sales have shown a positive growth trend, indicating a recovery in demand [1][21]. Financial Performance - The company achieved a revenue of 92.85 billion yuan in 2023, with a net profit of 5.33 billion yuan, reflecting a 24% year-on-year increase [3][21]. - Revenue is projected to grow to 98.97 billion yuan in 2024, with a corresponding net profit of 6.47 billion yuan, indicating a growth rate of 22% [2][3]. Emerging Business Development - The mining machinery market is expanding, with the company's revenue from this segment growing from 1.54 billion yuan in 2019 to 5.86 billion yuan in 2023, representing a CAGR of 39.61% [1][21]. - The high-altitude work machinery segment is also expected to grow significantly, with the company ranking third globally in sales [1][21]. International Expansion - The company has made significant strides in international markets, with overseas revenue reaching 37.22 billion yuan in 2023, accounting for 40.1% of total revenue [1][21]. - The company has established over 40 overseas subsidiaries and 300 distributors, enhancing its global presence [1][21].