ZHEJIANG DINGLI(603338) 长江证券·2024-12-02 01:15Investment Rating - The report maintains a "Buy" rating for Zhejiang Dingli (603338 SH) with a target PE of 14x and 12x for 2024 and 2025 respectively [9][138] Core Views - Despite facing heavy tariff pressures from the US (301 tariffs and anti-dumping/subsidy duties), the company achieved significant growth in revenue and profit margins due to its strong brand presence, differentiated product positioning, and continuous efficiency improvements [2][5] - The US market remains a key growth driver, with strong demand from manufacturing reshoring and potential for the company's boom lifts to gain market share [2][7] - In Europe, aging equipment and the company's competitive electric boom lifts position it well for growth, with potentially favorable anti-dumping rates compared to peers [2][7] - Emerging markets in Southeast Asia, the Middle East, Latin America, and Africa present significant growth opportunities as urbanization and industrialization continue [2][7] US Market Analysis - The company faced US 301 tariffs starting July 2018, but obtained exemptions in July 2019, leading to a recovery in US revenue [5][43] - In 2021, the US imposed anti-dumping and countervailing duties, with combined rates of 43 51% for the company, significantly lower than domestic peers [5][55] - A 2024 administrative review reduced the anti-dumping rate to 12 39%, a 19 15pct decrease from the original rate, potentially improving profitability [5][55] - The company's US revenue and profit margins grew significantly from 2021 onwards, driven by strong demand from manufacturing reshoring and inflation-driven price increases [5][61] Competitive Advantages - The company benefits from its partnership with CMEC, a US-based OEM with strong brand recognition, allowing it to command higher margins [6][79] - Its differentiated product strategy, including innovative designs like small-sized heavy-duty boom lifts and electric rough-terrain scissor lifts, provides a competitive edge [6][82] - Advanced manufacturing capabilities, including a "Future Factory" with 50% higher assembly efficiency, contribute to cost reduction and profitability [6][87] - Modular design across product lines, with 85% component commonality, further enhances cost efficiency and reduces customer maintenance costs [6][89] Growth Prospects - The US rental market for aerial work platforms is expected to grow, with equipment fleet size projected to reach 898 400 units by 2024, up 5% YoY [96][100] - In Europe, the average equipment age of 9 5 years creates a strong replacement demand, with the market expected to grow to 366 300 units by 2024 [110][113] - Emerging markets show significant potential, with Southeast Asia, Latin America, and Africa having much lower equipment penetration compared to developed markets [126][127] - The company's boom lift sales grew 57 67% YoY in H1 2024, accounting for 48 57% of total revenue, indicating strong product momentum [108][109] Financial Projections - Revenue is forecasted to grow 26% and 20% in 2024 and 2025, reaching 7 927 billion and 9 485 billion yuan respectively [138][145] - Net profit is expected to increase to 2 173 billion and 2 585 billion yuan in 2024 and 2025, with PE ratios of 14x and 12x [138][145]