Summary of Zhejiang Dingli Co Ltd. Conference Call Company Overview - **Company**: Zhejiang Dingli Co Ltd. (603338.SS) - **Industry**: Aerial Working Platforms (AWP) - **Market Cap**: Rmb25.1 billion / $3.5 billion - **Enterprise Value**: Rmb20.2 billion / $2.8 billion Key Points Industry and Market Outlook - The cyclical outlook for AWPs is improving, with signs indicating a bottoming out of the AWP cycle in the US and Europe, which is crucial as these regions account for over 50% of Dingli's revenue [17][25] - Positive supply-demand dynamics in the US construction machinery market are noted, with significant growth in AWP order bookings from competitors [17] - European market recovery is also observed, with increasing orders for construction equipment from companies like Volvo [17][23] Financial Performance and Projections - Dingli's earnings grew approximately 20% year-over-year in Q2 2025 despite volatile US tariffs [1] - Revised 2026-27 EPS estimates increased by 8-9%, with a new 12-month target price raised to Rmb64.0 from Rmb60.0 [1] - Revenue projections for 2026 are set at Rmb10,622 million, with a total revenue growth forecast of 17.3% for that year [12] US Anti-Dumping Duty Updates - The preliminary determination of the US anti-dumping duty for Dingli is set at 9.75% for the review period from April 1, 2023, to March 31, 2024 [2] - If the final determination aligns with the preliminary results, Dingli could see a reduction in duty rates by approximately 22 percentage points [14] - Potential reimbursement of excess duties estimated at around Rmb200 million for the periods 2022-23 and 2023-24 could further enhance earnings in 2026-27 [14] Investment Thesis - Dingli is positioned well in the Chinese AWP market, which is under-penetrated compared to global standards, driven by rising labor costs and increasing safety awareness [25] - The company is focusing on upgrading its product mix towards higher-ASP boom lifts, where it has established a technological advantage [25] - Competitive advantages in overseas markets are attributed to product differentiation, particularly in electrification [25][28] Risks and Challenges - Key risks include weaker-than-expected global construction activities, intensifying competition in the AWP market, and potential escalations in US-China trade tensions that could lead to unfavorable tariffs [30] Financial Metrics - Projected EPS for 2026 is Rmb4.47, with a P/E ratio of 11.6x [12] - Free cash flow is expected to grow significantly, reaching Rmb2,141.5 million by 2026 [13] Conclusion - The overall sentiment towards Dingli remains positive, with a "Buy" rating supported by improving market conditions, strong financial performance, and strategic positioning in the AWP industry [1][25]