XCMG(000425) Guotai Junan Securities·2024-11-01 10:56Investment Rating - The report maintains a "Buy" rating for the company, with a target price raised to 9.56 CNY, based on a 2024 PE of 18 times [3][4]. Core Views - The company, as a leading player in the domestic engineering machinery industry, has shown improved operational vitality following its mixed-ownership reform. The expansion into overseas markets is progressing well, and the company is expected to benefit from the recovery in demand in both domestic and international engineering machinery sectors in the second half of the year [2][3]. Summary by Sections Financial Performance - For the first three quarters of 2024, the company achieved a revenue of 68.73 billion CNY, a decrease of 4.1% year-on-year. The revenue for Q3 alone was 19.09 billion CNY, down 6.4% [3]. - The net profit attributable to shareholders for the first three quarters was 5.31 billion CNY, an increase of 9.7% year-on-year, with Q3 net profit reaching 1.60 billion CNY, up 28.3% [3]. - The gross margin for Q3 was 25.5%, an increase of 2.5 percentage points, attributed to a higher proportion of overseas revenue and a decline in raw material prices [3]. Operational Efficiency - The company's return on equity (ROE) for the first three quarters of 2024 was 9.1%, reflecting a 0.29 percentage point increase [3]. - The company has improved its asset quality, with net cash flow from operating activities reaching 2.043 billion CNY, a year-on-year increase of 24.45% [3]. Market Position and Strategy - The mixed-ownership reform has led to enhanced operational efficiency, with the company's global market share at 5.3%. In H1 2024, overseas revenue was 27.7 billion CNY, up 4.8%, accounting for 44% of total revenue [3]. - The company is focusing on high-end products, which saw a revenue increase of over 10% year-on-year, now making up more than 32% of total revenue [3].