XCMG(000425) 民生证券·2024-10-31 07:31Investment Rating - The report maintains a "Recommend" rating for XCMG (000425 SZ) [4] Core Views - XCMG's operating quality continues to improve, with high-end products driving profitability growth [2] - The domestic construction machinery industry is expected to enter an upward cycle, supported by government policies and infrastructure projects [2] - XCMG's high-end product revenue increased by over 10% YoY in H1 2024, accounting for more than 32% of total revenue [2] - The company's new energy products are growing rapidly, with new energy loader revenue nearly doubling YoY [2] - XCMG's operating cash flow reached RMB 2 043 million in Q1-Q3 2024, up 24 48% YoY [2] Financial Performance - XCMG achieved revenue of RMB 68 726 million in Q1-Q3 2024, down 4 11% YoY, with net profit attributable to parent company of RMB 5 309 million, up 9 71% YoY [2] - In Q3 2024, revenue was RMB 19 094 million, down 6 37% YoY, while net profit attributable to parent company increased 28 28% YoY to RMB 1 603 million [2] - Gross margin improved to 23 63% in Q1-Q3 2024, up 0 73 percentage points YoY [2] - Net profit margin reached 7 74% in Q1-Q3 2024, up 1 03 percentage points YoY [2] Industry Outlook - Domestic excavator sales showed signs of recovery, with 74 000 units sold in Jan-Sep 2024, up 8 6% YoY [2] - The construction machinery industry is expected to bottom out and rebound in 2024, driven by special bond issuances and infrastructure projects [2] - The industry still has significant growth potential as China implements its "two-step" development strategy [2] Product Development - XCMG's new energy products revenue grew 26 76% YoY, with new energy loaders accounting for 23 3% of total revenue [2] - The company's high-end products, including large horsepower mining graders and 100t+ mining trucks, saw significant market share increases [2] - XCMG's products targeting high-end markets in Europe, America, and Australia also gained market share [2] Financial Forecasts - Revenue is expected to grow from RMB 92 848 million in 2024E to RMB 121 989 million in 2026E [3][5] - Net profit attributable to parent company is projected to increase from RMB 6 473 million in 2024E to RMB 10 039 million in 2026E [3][5] - EPS is forecasted to rise from RMB 0 55 in 2024E to RMB 0 85 in 2026E [3][5] - PE ratio is expected to decline from 14x in 2024E to 9x in 2026E [3][5] Operational Efficiency - Accounts receivable decreased by RMB 2 546 million QoQ at the end of Q3 2024 [2] - Gross margin is projected to improve from 22 38% in 2023A to 23 66% in 2026E [5] - Net profit margin is expected to increase from 5 74% in 2023A to 8 23% in 2026E [5] - ROE is forecasted to grow from 9 49% in 2023A to 13 89% in 2026E [5]