DHI(SZ:002487)2025-10-31 00:59Summary of Dajin Heavy Industry Conference Call Company Overview - Company Name: Dajin Heavy Industry - Industry: Electric Components & Equipment - Core Business: Manufacturing towers for onshore and offshore wind turbine generators, and operating wind and solar farms totaling 250MW as of 2023 [10][11] Key Financial Highlights - Q325 Results: - Recurring net profit reached Rmb333 million, up 243% YoY, slightly beating market expectations [2][3] - Revenue growth of 96% YoY, primarily driven by the wind tower base business [2][3] - Gross margin improved to 36% from 25% in Q325, with a 31% gross margin for 9M25, up from 27% [3] - Operating cash flow increased to Rmb1.5 billion as of 9M25, up 174% YoY [3] - Market Performance: - 9M25 net profit increased by 248% YoY to Rmb896 million, representing 84% of UBS and consensus FY estimates [3] - Contract liabilities remained flat YoY at Rmb1.7 billion, indicating potential deceleration in new order intake due to capacity constraints [3] Investment Outlook - Rating: Buy with a 12-month price target of Rmb70.00, current price at Rmb52.63 [5][31] - Forecast Returns: - Expected price appreciation of 33.0% and a dividend yield of 0.3%, leading to a forecast stock return of 33.3% [9] Analyst Comments - Positive investor reaction anticipated due to robust earnings growth [4] Risks and Challenges - Downside Risks: - Slower-than-expected capacity additions could reduce wind tower demand [11][12] - Higher raw material prices, particularly for steel, may squeeze margins [12] - Increased competition from new entrants due to government policy changes [12] Valuation Metrics - Market Capitalization: Rmb33.6 billion (approximately US$4.72 billion) [5] - P/BV (12/25E): 4.0x [5] - Net Debt to EBITDA (12/25E): Not meaningful (NM) [5] Earnings Forecasts - EPS Estimates: - 12/25E: Rmb1.68 - 12/26E: Rmb3.04 - 12/27E: Rmb4.35 [6] Conclusion Dajin Heavy Industry shows strong financial performance with significant growth in net profit and revenue, driven by its core wind tower business. The company is well-positioned for future growth, although it faces potential risks from market competition and raw material costs. The investment outlook remains positive with a strong buy rating and substantial expected returns.