Zhejiang Dingli (603338 CH) Summary
Core Content
Zhejiang Dingli (Dingli) reported its 2024 earnings, which fell significantly below expectations. The company's net profit for 2024 was RMB1.63bn, a decline of 13% year-over-year (YoY), and substantially below the Bloomberg consensus by 20% to 21%. This negative surprise was attributed to two main factors: the advanced shipment of AWPs (Aerial Work Platforms) to US warehouses for customs clearance to avoid upcoming tariff hikes, leading to early cost recognition, and the acquisition of CMEC in mid-2024, which resulted in increased salary and warehouse expenses.
Key Financial Highlights
Earnings and Revenue
- 2024 Revenue: RMB7,799 million (+23.6% YoY)
- 2024 Net Profit: RMB1,628.7 million (-12.8% YoY)
- 2025E Revenue: RMB8,840 million (+13.3% YoY)
- 2025E Net Profit: RMB1,863.8 million (revised down by 13% from previous forecast)
- 2026E Revenue: RMB9,834 million (+11.2% YoY)
- 2026E Net Profit: RMB2,058.1 million
- 2027E Revenue: RMB10,653 million (+8.3% YoY)
- 2027E Net Profit: RMB2,243.4 million
Earnings Per Share (EPS)
- 2024 EPS (Reported): RMB3.68
- 2025E EPS: RMB4.06
- 2026E EPS: RMB4.43
Earnings Surprises
- 4Q24 Net Profit: RMB168 million, down 71% YoY
- 4Q24 Gross Profit: RMB515 million, down 28% YoY
- 4Q24 Gross Margin: 30.9%, down 14.9% YoY
Key Assumptions and Outlook
Tariff Impact
- The current AWP inventory in the US is sufficient to cover sales until September 2025, as it is not subject to the recent increase in tariffs.
- Dingli plans to pass on some of the tariff costs by increasing ASP (Average Selling Price) and may consider expanding production capacity in the US if tariffs remain high for a prolonged period, despite higher production costs.
Risks
- Downside Risks:
- Further increase in US tariffs
- Intensified competition in China's AWP market
- Continuous weakness in overseas demand
- Upside Risks:
- Substantial reduction in proposed tariffs on China
- Stronger-than-expected demand in other countries offsetting US weakness
Financial Ratios
| Ratio |
2023A |
2024A |
2025E |
2026E |
2027E |
| P/E (x) |
10.7 |
12.3 |
10.7 |
9.7 |
8.9 |
| P/B (x) |
2.2 |
2.0 |
1.8 |
1.6 |
1.4 |
| Dividend Yield (%) |
2.5 |
2.5 |
2.9 |
3.2 |
3.5 |
| ROE (%) |
23.3 |
17.1 |
17.4 |
17.0 |
16.4 |
Shareholding and Market Data
- Market Cap: RMB19,988.7 million
- Average 3-Month Turnover: RMB387.3 million
- 52-Week High/Low: RMB72.98 / RMB39.48
- Total Issued Shares: 506.3 million
- Current Price: RMB39.48
- Target Price (TP): RMB44.00 (revised from RMB51.00)
- 12-Month Price Performance: -11.4% (Downside)
Share Performance
| Period |
Absolute Return |
Relative Return |
| 1-Month |
-32.9% |
-28.8% |
| 3-Month |
-42.6% |
-41.7% |
| 6-Month |
-18.5% |
-15.2% |
Earnings Summary Table
| Year |
Revenue (RMB mn) |
YoY Growth (%) |
Net Profit (RMB mn) |
YoY Growth (%) |
EPS (Reported) (RMB) |
Consensus EPS (RMB) |
P/E (x) |
| FY23A |
6,312 |
15.9 |
1,867.2 |
48.5 |
3.69 |
4.09 |
10.7 |
| FY24A |
7,799 |
23.6 |
1,628.7 |
-12.8 |
3.22 |
4.92 |
12.3 |
| FY25E |
8,840 |
13.3 |
1,863.8 |
14.4 |
3.68 |
4.06 |
10.7 |
| FY26E |
9,834 |
11.2 |
2,058.1 |
10.4 |
4.06 |
5.73 |
9.7 |
| FY27E |
10,653 |
8.3 |
2,243.4 |
9.0 |
4.43 |
0.00 |
8.9 |
Financial Summary
Income Statement
| Item |
2022A (RMB mn) |
2023A (RMB mn) |
2024A (RMB mn) |
2025E (RMB mn) |
2026E (RMB mn) |
2027E (RMB mn) |
| Revenue |
5,445 |
6,312 |
7,799 |
8,840 |
9,834 |
10,653 |
| Gross Profit |
1,690 |
2,430 |
2,733 |
3,041 |
3,303 |
3,576 |
| Net Profit |
1,257 |
1,867 |
1,629 |
1,864 |
2,058 |
2,243 |
Balance Sheet
| Item |
2022A (RMB mn) |
2023A (RMB mn) |
2024A (RMB mn) |
2025E (RMB mn) |
2026E (RMB mn) |
2027E (RMB mn) |
| Total Assets |
11,802 |
14,207 |
15,354 |
17,290 |
18,854 |
20,870 |
| Total Liabilities |
4,737 |
5,242 |
5,316 |
5,895 |
5,978 |
6,388 |
| Total Shareholders Equity |
7,065 |
8,965 |
10,035 |
11,393 |
12,873 |
14,478 |
Cash Flow
| Item |
2022A (RMB mn) |
2023A (RMB mn) |
2024A (RMB mn) |
2025E (RMB mn) |
2026E (RMB mn) |
2027E (RMB mn) |
| Net Cash from Operations |
937 |
2,227 |
1,917 |
1,485 |
1,788 |
1,801 |
| Net Cash from Investing |
-1,222 |
-863 |
-179 |
-178 |
-113 |
-83 |
| Net Cash from Financing |
45 |
-520 |
-997 |
-636 |
-705 |
-713 |
| Net Change in Cash |
- |
- |
- |
- |
- |
- |
Key Assumptions Change
| Year |
2025E |
2026E |
2027E |
Change |
| Revenue |
8,840 |
9,834 |
10,653 |
- |
| Gross Margin |
34.4% |
33.6% |
33.6% |
-2.1ppt |
| Net Profit |
1,864 |
2,058 |
2,243 |
-13.1% |
Ratings and Recommendations
- CMBIGM Rating: HOLD
- Target Price (TP): RMB44.00
- Previous TP: RMB51.00
- 12x P/E (2025E): Based on 1 SD below the three-year average P/E of 13.5x
Analyst Certification
- The analyst certifies that all views expressed reflect personal opinions and not influenced by compensation.
- No trading in the stock covered in the report within 30 days prior to its release, and no trading within 3 business days after release.
- No conflict of interest due to the company's position or market-making activities.
Disclosures
- CMBIGM does not provide personalized investment advice.
- Information is for clients only and may not be reproduced without consent.
- Past performance does not guarantee future results.
- The report is not an offer or solicitation to buy or sell securities.
CMBIGM Ratings Definitions
- BUY: Potential return of over 15% over next 12 months
- HOLD: Potential return of +15% to -10% over next 12 months
- SELL: Potential loss of over 10% over next 12 months
- NOT RATED: Not rated by CMBIGM
- OUTPERFORM: Industry expected to outperform the relevant broad market benchmark
- MARKET-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark
- UNDERPERFORM: Industry expected to underperform the relevant broad market benchmark
CMB International Global Markets Limited
- A wholly owned subsidiary of CMB International Capital Corporation Limited
- Address: 45/F, Champion Tower, 3 Garden Road, Hong Kong
- Tel: (852) 3900 0888, Fax: (852) 3900 0800
Important Disclosures
- Risks involved in transacting in securities.
- Information may not be suitable for all investors.
- CMBIGM does not provide individually tailored investment advice.
- No liability for losses, damages, or expenses incurred from reliance on the report.
- Information is based on publicly available and reliable data.
- The report is provided for the use of intended recipients only.
