恒立液压：非挖及海外业务增长强劲，多元化持续推进

Investment Rating - The investment rating for the company is "Buy" and is maintained [4]. Core Views - Despite the downturn in the excavator industry, the company's excavator segment outperformed the industry, with strong support from non-excavation businesses. In 2023, the sales of non-excavation hydraulic cylinders, pumps, valves, and motors achieved rapid growth year-on-year. The company's internationalization strategy is progressing, with foreign revenue increasing by 10% year-on-year, accounting for approximately 21% of total revenue, and gross margin improving by 3.17 percentage points to 37.45%. The hydraulic component production base in Mexico is expected to begin trial production in Q2 2024, which is likely to further enhance overseas market share. The increase in the proportion of non-standard product revenue has led to a slight rise in the company's gross margin in 2023. Looking ahead, the ongoing diversification and internationalization strategies are expected to contribute to incremental growth, with structural optimization and cost reduction efforts likely to enhance the company's profitability [5][6][10]. Summary by Sections Financial Performance - In 2023, the company achieved revenue of 89.85 billion yuan, a year-on-year increase of 9.61%. The net profit attributable to the parent company was 24.99 billion yuan, up 6.66% year-on-year. The net profit excluding non-recurring items was 24.47 billion yuan, an increase of 9.67% year-on-year. In Q4 2023, the company reported revenue of 26.40 billion yuan, a year-on-year increase of 15.95%, and a net profit of 7.45 billion yuan, up 25.56% year-on-year [5][6]. Business Segments - The non-excavation business showed remarkable growth, with non-standard hydraulic cylinders, pumps, valves, and motors achieving year-on-year sales growth of 6.06%, 410.23%, 43.76%, and 119.18%, respectively. The company is also testing new products such as ball screws and guide rails, which are expected to open new growth avenues in 2024 [5][6]. International Expansion - The company's international market share is gradually increasing, with foreign sales revenue growing by 10% year-on-year, representing about 21% of total revenue. The gross margin for international sales improved by 3.17 percentage points to 37.45%. The establishment of a hydraulic component production base in Mexico is expected to enhance global competitiveness [5][6]. Profitability and Cost Management - The company's gross margin slightly increased by 1.35 percentage points to 41.90% in 2023, primarily due to the rising proportion of new products in non-engineering machinery, which have higher profitability than traditional engineering machinery products. The company has actively pursued cost reduction initiatives, with 343 effective cost reduction projects yielding a total savings of 88.03 million yuan [6][10]. Future Outlook - The domestic engineering machinery industry is expected to stabilize in 2024, with the company's excavator business performing steadily. The ongoing diversification and internationalization strategies are anticipated to continue contributing to growth, while structural optimization and cost reduction efforts are likely to enhance profitability. The company is projected to achieve net profits of 27.27 billion yuan and 32.87 billion yuan in 2024 and 2025, respectively, with corresponding price-to-earnings ratios of 25 times and 21 times [6][10].