Jiangsu Hengli Hydraulic CO.(601100)2024-09-02 05:31Investment Rating - The investment rating for the company is "Outperform the Market" [1][4][10]. Core Views - The company has achieved steady revenue growth of 8.56% year-on-year in the first half of 2024, with total revenue reaching 4.833 billion yuan and a net profit of 1.288 billion yuan, reflecting a 0.71% increase year-on-year [1]. - The growth in performance is attributed to the recovery in domestic excavator sales, a 15% increase in overseas revenue, and continuous expansion in non-excavator business [1]. - The company's gross margin improved to 41.64%, up by 2.62 percentage points, while the net margin decreased to 26.69%, down by 2.08 percentage points, primarily due to foreign exchange losses [1]. - The diversification strategy is yielding results, with non-excavator sales of heavy-duty equipment increasing by 21.53% and non-excavator pump and valve sales rising by 24.30% [1]. - The company is actively expanding its overseas market presence, with a 15.29% increase in overseas revenue and nearing completion of its factory in Mexico, which will enhance its market reach in the Americas [1]. - The domestic excavator market is showing signs of stabilization, with a 4.66% year-on-year increase in sales during the first half of 2024, indicating potential recovery in demand [1]. Financial Forecasts - The company forecasts net profits of 2.673 billion yuan, 3.137 billion yuan, and 3.688 billion yuan for 2024, 2025, and 2026 respectively, with corresponding P/E ratios of 24, 21, and 18 [1][2][11]. - Revenue projections for the next few years are 9.552 billion yuan for 2024, 11.053 billion yuan for 2025, and 12.930 billion yuan for 2026, reflecting growth rates of 6.3%, 15.7%, and 17.0% respectively [2][11].