LIUGONG(000528) 华鑫证券·2024-04-29 03:30Investment Rating - The report assigns a "Buy" rating for the company, marking the initial coverage [2]. Core Insights - The company's performance in Q1 2024 met expectations, with significant improvement in profitability. Revenue reached 7.939 billion yuan, a year-on-year increase of 1.88%, while net profit attributable to shareholders was 498 million yuan, up 58.03% year-on-year. The gross margin was 22.79%, an increase of 3.99 percentage points, and the net margin was 6.49%, up 2.33 percentage points [2][5]. Summary by Sections Performance Overview - In 2023, the company achieved a total revenue of 27.519 billion yuan, with a year-on-year growth of 3.9%. The net profit attributable to shareholders was 868 million yuan, reflecting a growth of 44.8% [5][15]. - The company has maintained a strong cash flow, with net cash flow from operating activities increasing by 69.90% to 1.629 billion yuan in 2023 [5]. Market Position - The domestic engineering machinery industry is currently in a downward cycle, yet the company outperformed the overall industry growth rate. The sales growth of earthmoving machinery products exceeded the industry average by 7%, while overseas market sales growth outpaced the industry by 20% [2][5]. International Expansion - The company has significantly enhanced its overseas performance, with total overseas sales reaching 114.62 billion yuan, a year-on-year increase of 41.18%, accounting for 41.65% of total revenue. The sales of electric loaders grew by 67%, maintaining the top market share [2][5]. Profitability Improvement - The company has shown a notable improvement in profitability, with a gross margin of 20.82% in 2023, an increase of 4.02 percentage points, and a net margin of 3.42%, up 0.98 percentage points [5][15]. Future Projections - Revenue forecasts for 2024, 2025, and 2026 are projected at 31.112 billion yuan, 34.400 billion yuan, and 37.766 billion yuan, respectively. The expected earnings per share (EPS) for the same years are 0.78 yuan, 0.93 yuan, and 1.07 yuan, with corresponding price-to-earnings (PE) ratios of 14, 11, and 10 times [5][15].