XCMG(SZ:000425) Changjiang Securities·2025-05-06 11:47Investment Rating - The investment rating for the company is "Buy" and is maintained [9]. Core Views - The domestic business is expected to recover from excavators to non-excavator equipment, with significant improvement in profitability [2][6]. - The company's international operations have shown significant results, with overseas revenue growing by 12% year-on-year in 2024, accounting for 45.5% of total revenue [2][12]. - The company's profitability continues to improve, with gross margin and net margin both showing year-on-year increases for 2024 and Q1 2025 [2][12]. Summary by Sections Domestic Business Performance - In 2024, the company achieved revenue of 91.66 billion yuan, a year-on-year decrease of 1.28%, while net profit attributable to shareholders was 5.976 billion yuan, an increase of 12.20% [6]. - For Q1 2025, the company reported revenue of 26.815 billion yuan, a year-on-year increase of 10.92%, and net profit attributable to shareholders of 2.022 billion yuan, up 26.37% [6]. International Business Growth - The company's international revenue is expected to continue growing, with a significant increase in overseas market share and a well-established international operational framework [2][12]. - The company has over 40 overseas subsidiaries and more than 300 overseas distributors, enhancing its competitive strength in international markets [12]. Profitability and Cash Flow - The gross margin for 2024 was 22.55%, reflecting a year-on-year increase of 1.75 percentage points, driven by higher overseas sales and product mix optimization [12]. - The net margin for 2024 was 6.53%, up 0.89 percentage points year-on-year, indicating improved profitability [12]. - The net cash flow from operating activities increased by 60% year-on-year for 2024 and by 257% for Q1 2025, demonstrating significant improvement in operational quality [2][12]. Future Outlook - The domestic engineering machinery industry is expected to shift from excavators to non-excavator equipment, with a clear upward trend anticipated [12]. - The company is projected to achieve net profits of 8.106 billion yuan and 10.346 billion yuan in 2025 and 2026, respectively, with corresponding price-to-earnings ratios of 13 times and 10 times [12].