LIUGONG(000528) 中国银河·2024-11-17 07:03Investment Rating - The report gives a "Buy" rating for the company, indicating a positive outlook for future performance [4]. Core Insights - The company is a leading player in the engineering machinery sector, showing significant improvement in profitability. It has a diverse product range including loaders and excavators, with a revenue growth of 4% in 2023 despite a 1.12% decline in the industry [2][3]. - The domestic demand for engineering machinery is on the rise, supported by favorable monetary and fiscal policies, while international markets present substantial growth opportunities [2][3][13]. - The company's ongoing business expansion and mixed-ownership reform are enhancing operational efficiency and market competitiveness [3][20]. Summary by Sections 1. Company Overview - The company is a well-established manufacturer in the engineering machinery sector, with a significant focus on earth-moving machinery, which accounted for 58% of its revenue in 2023 [2][24]. - It has a comprehensive product line that includes cranes, mining machinery, agricultural machinery, and forklifts, making it one of the few companies globally that can provide a full range of solutions [2][24]. 2. Industry Analysis - The domestic market for excavators has shown a year-on-year increase of 21.6% in October, with a cumulative growth of 9.8% from January to October 2023, indicating a recovery in demand [2][60]. - The global engineering machinery market is valued at approximately 2,434 billion USD in 2023, with a 5.6% year-on-year growth, highlighting the potential for Chinese companies to increase their market share internationally [2][3]. 3. Business Development - The company has successfully expanded its business into new areas, achieving a 159% year-on-year increase in electric product sales in the first half of 2024, and its excavator market share has reached over 14% [3][13]. - The mixed-ownership reform has improved decision-making and management efficiency, contributing to enhanced profitability [3][20]. 4. Financial Forecast and Investment Recommendations - The company is expected to achieve net profits of 1.506 billion CNY, 2.056 billion CNY, and 2.634 billion CNY for the years 2024 to 2026, respectively, with a corresponding PE ratio of 16.5x, 12.1x, and 9.5x [3][6]. - The report anticipates continued revenue and profit growth driven by domestic demand recovery and international expansion [3][6].