New AWP capacity expansion plan to further enhance global competitiveness

Investment Rating - The report maintains a "BUY" rating for Zhejiang Dingli with a target price of RMB70, representing an upside of 24.8% from the current price of RMB56.10 [2]. Core Insights - Zhejiang Dingli plans to invest RMB1.7 billion to build a new production base for 20,000 units of new energy aerial work platforms (AWP), which is expected to enhance its global competitiveness [2]. - The new capacity is projected to contribute approximately RMB2.5 billion in annual sales once operational, with completion expected in 36 months [2]. - The company has sufficient internal resources to finance the capital expenditure without needing equity financing [2]. Financial Performance Summary - Revenue is expected to grow from RMB5,445 million in FY22 to RMB6,267 million in FY23, and further to RMB7,508 million in FY24, reflecting a year-on-year growth of 15.1% and 19.8% respectively [9]. - Net profit is projected to increase from RMB1,257 million in FY22 to RMB1,693 million in FY23, and RMB1,963 million in FY24, indicating a growth rate of 34.7% [9]. - The earnings per share (EPS) is forecasted to rise from RMB2.48 in FY22 to RMB3.34 in FY23, and RMB3.88 in FY24, showing a year-on-year growth of 34.7% [9]. Capacity Expansion and Market Position - The new production base will add 30% capacity by 2026-27, focusing on scissors lifts to meet rising demand for electric and advanced models in overseas markets [2]. - Dingli currently operates five production bases, and the new facility will require acquiring additional land in Deqing, Zhejiang [2]. - The company is positioned to benefit from the increasing demand for aerial work platforms, particularly in international markets [2]. Revenue Breakdown and Growth Projections - The revenue from core business segments is expected to grow significantly, with boom lifts projected to generate RMB2,250 million in FY24 and scissor lifts expected to reach RMB4,419 million [4]. - The average gross margin for the core business is anticipated to improve from 29.4% in FY22 to 36.5% in FY24 [4]. - The overall revenue growth rate is projected to stabilize around 15.2% in FY25, indicating sustained demand and operational efficiency [12].