20240325-招银国际-浙江鼎力-603338.SH-New_AWP_capacity_expansion_plan_to_further_enhance_global_competitiveness_7页_1mb

Zhejiang Dingli (603338 CH) Capacity Expansion Plan

Zhejiang Dingli announced a plan to spend RMB1.7bn to build a new production base for 20,000 units of new energy aerial work platforms (AWP), focusing on scissors lifts. The project is expected to take 36 months to complete, potentially starting early based on past experience, with annual sales contribution estimated at around RMB2.5bn. This will increase capacity by approximately 30% in 2026-2027E.

Dingli has sufficient net cash of ~RMB3bn to fund the capex without equity financing, and while no earnings contribution is expected before 2026E, the expansion aims to enhance global competitiveness. The company maintains its BUY rating with an unchanged target price of RMB70 (18x 2024E P/E, 1SD below historical average).

Key risks include intensified competition in China's AWP market, slowdown of overseas demand, and a sharp rebound of the RMB rate. Jiangsu Hengli, a major supplier, is anticipated to benefit from medium-term growth.

Financial highlights show steady revenue and profit growth:

• Revenue: From RMB4,939mn in 2021A to RMB8,646mn in 2025E.
• Net profit: From RMB884.5mn in 2021A to RMB2,229mn in 2025E.
• P/E ratio: From 43.8x in 2021A to 12.7x in 2025E.

Issuer: CMB International Global Markets (March 25, 2024).