XCMG(000425) Guotou Securities·2024-11-03 01:23Investment Rating - The investment rating for the company is "Buy-A" with a 12-month target price of 9.52 CNY, compared to the current stock price of 8.16 CNY [5][7]. Core Views - The company's revenue for the first nine months of 2024 was 68.726 billion CNY, a year-on-year decrease of 4.11%, while the net profit attributable to shareholders was 5.309 billion CNY, an increase of 9.71% [1]. - In Q3 2024, the company achieved a revenue of 19.094 billion CNY, down 6.37% year-on-year, but net profit rose by 28.28% to 1.603 billion CNY [1]. - The company is experiencing a structural differentiation in domestic sales, with strong demand in emerging markets driving export growth [2]. - The gross margin improved to 25.54% in Q3, up 2.53 percentage points year-on-year, indicating enhanced profitability [3]. - Operating cash flow for the first nine months was 2.043 billion CNY, a year-on-year increase of 24.45%, reflecting improved financial stability [4]. Summary by Sections Financial Performance - For the first nine months of 2024, the company reported a revenue of 68.726 billion CNY and a net profit of 5.309 billion CNY, with Q3 figures showing a revenue of 19.094 billion CNY and a net profit of 1.603 billion CNY [1]. - The gross margin for Q3 was 25.54%, with a net margin of 8.31%, indicating a positive trend in profitability [3]. Market Dynamics - Domestic sales are facing challenges, particularly in non-earthmoving machinery, while exports are benefiting from recovering demand in Southeast Asia and strong growth in Africa and Latin America [2]. - The company is expected to see a recovery in domestic sales in Q4 2024, supported by various policy measures [2]. Future Projections - Revenue projections for 2024-2026 are 94.08 billion CNY, 101.69 billion CNY, and 113.04 billion CNY, with corresponding net profits of 6.35 billion CNY, 8.08 billion CNY, and 10.05 billion CNY [7][8]. - The company is expected to maintain a leading position in the engineering machinery industry, benefiting from cyclical improvements in domestic demand and ongoing reforms [7].