20240110-招银国际-宏信建发-09930.HK-Expect_solid_2023E_earnings__Higher_free_float_to_boost_valuation_5页_960kb

Horizon CD is expected to achieve solid financial performance in 2023 with a core net profit of RMB1bn (+20% YoY growth), due to scaled-back capex to ~RMB1bn. Key growth drivers include overseas expansion targeting 20 service outlets in 2024E, with higher pricing in new markets, and growth in AWP fleet size through re-renting. Valuation remains positive with a maintained BUY rating and revised target price to HK$5.2 based on 13x P/E, improved free cash flow, and reduced net debt/equity ratio to 106% by end-2025E. Risks include potential declines in rental rates/utilisation rates, weakness in manufacturing investments, and challenges in overseas market penetration. Financial metrics show steady revenue growth (13.4% YoY for 2023E) and profitability improvements, while balance sheet strengthening with lower gearing over time. Overall, the company presents strong potential for outperformance with limited downside if execution risks materialize.