Investment Rating - Maintain BUY with a new target price of HK$8, based on 11x 2024E P/E, reflecting a significant decrease from the previous target price of HK$15.40 [2][4] Core Views - The solar power business remains a major concern for investors, leading to a downward revision of earnings forecasts by 27% for 2024E and 30% for 2025E [2] - Despite challenges in the solar segment, overseas sales of large mining trucks and telescopic handlers are expected to drive growth [2] - The company aims for RMB5 billion in revenue from solar products, equipment, and solar farms in 2024E, with a focus on business diversification [2] Earnings Summary - Revenue for 2023 was RMB20.3 billion, a 30.5% increase YoY, with adjusted net profit at RMB1.9 billion, reflecting a 15.9% growth YoY [3][5] - The net debt/equity ratio is projected to rise to 30.8% in 2024E, up from 21% at the end of 2023 [2][5] - The company targets revenue growth to RMB26.7 billion in 2024E, with a projected adjusted net profit of RMB2.1 billion [3][12] Segment Performance - Revenue from large mining trucks surged 4.9x YoY to RMB1.1 billion in 2023, with a target of RMB1.8 billion in 2024E [2] - Telescopic handlers also showed significant growth, with revenue increasing 2.6x YoY to RMB760 million in 2023, targeting RMB1.5 billion in 2024E [2] - Large-size port machinery revenue was RMB1.2 billion in 2023, with a backlog of RMB3.6 billion providing visibility for future revenue [2] Regional Revenue Breakdown - Revenue from Mainland China increased to RMB13.9 billion in 2023, while sales in Russia grew significantly by 175.6% [9] - The company experienced a decline in sales to the USA, which dropped by 12.9% [9] Key Financial Metrics - The adjusted EPS for 2024E is projected at RMB0.67, with a P/E ratio of 6.9x [3][12] - The company’s gross margin is expected to stabilize around 25.6% in 2024E [10]
Solar power business remains major investor concern during site visit