Zhejiang Dingli (603338 CH): Q3 2024 Results and Outlook
Q3 2024 Highlights:
- Net Profit: Increased by 38% YoY to RMB636 million.
- EBIT: Grew by 20% YoY to RMB672 million.
- Revenue: Rose by 38% YoY to RMB2.27 billion.
- Gross Margin: Decreased by 4.8 percentage points YoY to 36.9%.
Market Focus:
- US Market: Remains the most promising market, with a strategic focus.
- Anti-Dumping Duties: Preliminary duties in the US decreased from 31.54% to 9.33%, and in the EU from nil to 31.3%. These reductions should alleviate concerns.
Key Assumptions:
- Revenue Targets: Maintained at US$500 million (~RMB3.5 billion) for the US market in 2024.
- Boom Lifts: Targeted to deliver 6,000 units globally, including 2,000 units in the US.
- Product Differentiation: To mitigate AD duty impacts in the EU, Dingli plans to offer differentiated products to maintain pricing power.
Financial Overview:
- Revenue: Projected to grow to RMB7.57 billion in 2024, RMB8.81 billion in 2025, and RMB10.41 billion in 2026.
- Gross Margin: Expected to stabilize at around 37.8% in 2024, 37.9% in 2025, and 37.8% in 2026.
- P/E Ratio: 10.1x in 2024, 8.6x in 2025, and 8.6x in 2026.
- P/B Ratio: 2.0x in 2024, 2.0x in 2025, and 1.7x in 2026.
Key Risks:
- Intensified Competition in China’s AWP Market
- Slowdown in Overseas Demand
- Higher-than-Expected Anti-Dumping Duties in the US and EU
Valuation:
- Target Price: RMB75.00.
- Upside/Downside Potential: 54.6% upside and 54.6% downside.
- Current Price: RMB48.50.
Financial Metrics
Revenue Breakdown by Product:
- Boom Lifts: RMB2.45 billion in 2024, RMB3.45 billion in 2025, and RMB4.36 billion in 2026.
- Scissor Lifts: RMB3.29 billion in 2024, RMB3.59 billion in 2025, and RMB3.95 billion in 2026.
- Vertical Lifts: RMB479 million in 2024, RMB562 million in 2025, and RMB625 million in 2026.
Revenue Breakdown by Region:
- Overseas: RMB2.27 billion in 2024, RMB2.83 billion in 2025, and RMB3.59 billion in 2026.
- China: RMB4.65 billion in 2024, RMB5.45 billion in 2025, and RMB6.31 billion in 2026.
Average Selling Prices (ASPs):
- Boom Lifts: Increased by 3.0% in 2024, 7.6% in 2025, and remained flat in 2026.
- Scissor Lifts: Increased by 3.7% in 2024, 10.4% in 2025, and remained flat in 2026.
- Vertical Lifts: Increased by 45.6% in 2024, 4.4% in 2025, and remained flat in 2026.
Gross Margin Trend:
- Boom Lifts: Increased from 18.2% in 2021 to 33.5%
