XCMG(SZ:000425) Great Wall Securities·2024-05-24 11:32Investment Rating - The report assigns an "Accumulate" rating for XCMG Machinery (000425.SZ) as a first-time rating [1]. Core Views - The company's internationalization and diversification strategies are driving growth, with a steady improvement in profitability [1][4]. - In 2023, XCMG's total revenue was 92.848 billion yuan, a slight decrease of 1.03% year-on-year, while net profit attributable to shareholders increased by 23.51% to 5.326 billion yuan [2]. - The company aims to enhance its market position through high-end, intelligent, green, service-oriented, and international transformation [4]. Financial Performance Summary - Revenue and Profitability: - Revenue is projected to grow from 92.848 billion yuan in 2023 to 102.412 billion yuan in 2024, reflecting a year-on-year growth of 10.3% [1][6]. - Net profit is expected to increase from 5.326 billion yuan in 2023 to 6.643 billion yuan in 2024, with a growth rate of 24.7% [1][6]. - Key Financial Ratios: - Return on Equity (ROE) is forecasted to rise from 9.1% in 2023 to 10.7% in 2024 [1][6]. - Earnings per Share (EPS) is expected to increase from 0.45 yuan in 2023 to 0.56 yuan in 2024 [1][6]. - Cost Management: - The company maintained stable expense ratios, with sales, management, and financial expenses showing varied changes [2]. Strategic Initiatives - XCMG has established five sales subsidiaries in countries like the UK and Singapore, reinforcing its international strategy [2]. - The company reported a significant increase in overseas revenue, which reached 37.220 billion yuan in 2023, up 33.7% year-on-year, accounting for 40.09% of total revenue [2]. - The traditional machinery sector remains a stronghold, with a focus on enhancing efficiency and competitiveness despite domestic demand challenges [3]. Emerging Industries - The strategic emerging industries are showing robust growth, contributing significantly to revenue, particularly in high-altitude work platforms and mining machinery [4]. - The company is also advancing in agricultural machinery, achieving a tenfold increase in revenue due to differentiated technology and reliability [4].