XCMG(000425) 华龙证券·2024-05-12 07:00Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [1]. Core Views - The company, XCMG Machinery, has demonstrated resilience in performance despite a slight decline in revenue in 2023, achieving a revenue of 92.848 billion yuan, a year-on-year decrease of 1.03%, while net profit attributable to shareholders increased by 23.51% to 5.326 billion yuan [1][12]. - The report highlights the positive impact of ongoing government policies aimed at infrastructure investment and the recovery of the real estate sector, which are expected to boost demand for construction machinery [1][21]. - The company's international expansion has been fruitful, with overseas revenue reaching 37.22 billion yuan in 2023, a year-on-year increase of 33.7%, accounting for over 40% of total revenue [1][28]. Summary by Sections 1. Company Overview - XCMG Machinery, established in 1993, has become a leading player in the engineering machinery industry, ranking third globally with a sales revenue of 13.407 billion USD in 2022 [7][8]. - The company has a diverse product portfolio, including cranes, earth-moving machinery, concrete machinery, and road machinery, with several products holding leading positions in the domestic and global markets [9][10]. 2. Domestic Demand - The report indicates that the engineering machinery sector is at a cyclical low but is expected to recover, driven by government policies and infrastructure investments [16][21]. - In 2023, domestic sales of key machinery types, such as excavators and cranes, showed signs of stabilization, with a decrease in sales volume narrowing compared to previous years [19][20]. 3. Export Performance - The company has maintained a strong trend in international sales, with excavator exports reaching 109,453 units in 2022, a 59.96% increase, although a slight decline was noted in 2023 due to high base effects [28]. - The report emphasizes the growing recognition of domestic brands in international markets, with XCMG and SANY among the top players [29][36]. 4. Financial Forecasts - The financial projections for the company indicate a steady growth trajectory, with expected net profits of 6.579 billion yuan, 7.634 billion yuan, and 8.916 billion yuan for 2024, 2025, and 2026, respectively, reflecting year-on-year growth rates of 23.5%, 16%, and 16.8% [2][12]. - The report notes an improvement in profit margins, with a gross margin of 22.38% and a net margin of 5.64% in 2023, both showing year-on-year increases [12][13].