Summary of Conference Call on Zhejiang Dingli Machinery Co., Ltd. Company Overview - **Company**: Zhejiang Dingli Machinery Co., Ltd. (603338.SS) - **Industry**: Construction Machinery Key Points and Arguments 1. **Positive Outlook for Construction Machinery**: The company remains optimistic about the construction machinery sector, driven by a domestic up-cycle, overseas recovery, and market share gains by Chinese brands in 2026 [1][5][10] 2. **Sales Growth**: In Q3 2025, Dingli achieved solid growth in both domestic and overseas sales, with domestic sales growth of key OEMs ranging from 10% to 23%, and overseas sales growth between 10% and 30% [2][5] 3. **Market Projections**: The domestic construction machinery market is expected to grow at a compound annual growth rate (CAGR) of approximately 15% from 2025 to 2028, driven by replacement cycles, electrification, and mega infrastructure projects [3][5] 4. **Overseas Growth Drivers**: Emerging market urbanization and recovery in developed markets are anticipated to drive overseas growth, particularly in mining and infrastructure sectors [4][5] 5. **Upgrade to Overweight (OW)**: Dingli's rating was upgraded to Overweight due to its solid overseas growth, easing US tariffs, and a broader product mix [5][10] 6. **Financial Performance**: Dingli reported a 3% year-over-year revenue increase in Q3 2025, with a net profit of Rmb542 million, despite a 15% decline in net profit year-over-year [11][12] 7. **Tariff Impact**: Eased US tariffs are expected to positively impact sales, with a projected blended US tariff of approximately 68% in 2026, down from 78% in 2025 [15][59] 8. **New Product Development**: Dingli is focusing on new product launches, including AWP with robotic arms, to address long-term labor substitution demand [14][59] 9. **Revenue Forecasts**: Revenue estimates for Dingli have been raised by 8% for 2025, 14% for 2026, and 19% for 2027, reflecting better US sales and recovery in European demand [45][46] 10. **Price Target**: The new price target for Dingli is set at Rmb64, based on a 15x P/E multiple for 2026 estimates [5][46] Additional Important Information - **Competitive Landscape**: Key overseas players like Genie and JLG are facing sales and margin pressures, contrasting with Dingli's performance [12][22] - **Market Share Gains**: Dingli is expected to continue gaining market share in overseas markets, particularly in Africa and the Middle East, driven by strong demand in mining and infrastructure [4][5] - **Long-term Potential**: The aftermarket sales of mining excavators are projected to generate significantly higher revenue compared to main equipment sales, indicating long-term growth potential [34] - **Operational Efficiency**: Dingli's operational efficiency is expected to improve, contributing to better margins despite ongoing expansion [16][46] This summary encapsulates the key insights and projections regarding Zhejiang Dingli Machinery Co., Ltd. and the construction machinery industry as discussed in the conference call.

Investment Rating - The investment rating for Zhejiang Dingli Machinery Co Ltd. is Overweight [6]. Core Insights - The report indicates that China's Aerial Working Platform (AWP) sales have shown a narrowing decline, with a 10% year-over-year decrease in March, totaling 18.2k units, compared to a 20% decline in the first three months of 2025. Domestic sales fell by 22% year-over-year to 8.8k units, while exports increased by 6% year-over-year to 9.4k units [1]. - Dingli has suspended shipments to the US due to tariffs but anticipates growth in non-US markets [1]. Summary by Sections Sales Performance - In March, AWP sales in China decreased by 10% year-over-year to 18.2k units, with domestic sales down 22% to 8.8k units and exports up 6% to 9.4k units [1]. Company Overview - Zhejiang Dingli Machinery Co Ltd. is a leading supplier of aerial working platforms in China, making the AWP sales volume a significant indicator for its share price [4]. Financial Metrics - The price target for Dingli is set at Rmb70.00, indicating a potential upside of 77% from the closing price of Rmb39.48 on April 18, 2025 [6]. - The company has a market capitalization of Rmb19,991 million and an enterprise value of Rmb15,647 million [6]. - Projected revenues for the fiscal years ending in December are Rmb6,312 million for 2023, Rmb8,450 million for 2024, Rmb10,020 million for 2025, and Rmb11,487 million for 2026 [6]. Valuation - The report applies a P/B multiple of 2.8x to the 2025 estimated book value per share, which aligns with its average P/B over the past three years, reflecting similar ROE levels and earnings growth [8].