HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lonking-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3944:1" rel="noopener">Lonking Holdings (3339 HK)</a>'s positive profit alert suggested that FY24 earnings will beat the market consensus by a significant 25.8-34.6%. </li>
<li>Better profitability indicates that it will further accumulate net cash. At an unchanged 50% payout ratio, it yields 7.8%, but at a higher payout of 70%, it will be 10.9%.</li>
<li>Trading on 0.59x P/B, it is at the historical average valuation. If 1SD above average, there will be a 20% upside. It will go to HK$2.20 if 2SD above.</li>
</ul>



Lonking Holdings (3339 HK)'s positive profit alert suggested that FY24 earnings will beat the market consensus by a significant 25.8-34.6%. 
Better profitability indicates that it will further accumulate net cash. At an unchanged 50% payout ratio, it yields 7.8%, but at a higher payout of 70%, it will be 10.9%.
Trading on 0.59x P/B, it is at the historical average valuation. If 1SD above average, there will be a 20% upside. It will go to HK$2.20 if 2SD above.


Lonking (3339 HK): A (Massive) Positive Profit Alert

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lonking-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3944:1" rel="noopener">Lonking Holdings (3339 HK)</a>, as the leader in wheel loader, should see strong profit as industry sales grew 30% in Dec 2025 and 18.4% in FY25.</li>
<li>Export will be an important driver with the government's push for overseas expansion of high-end manufacturing. In FY25, industry export sales reached 51.5% of total. </li>
<li>Net cash, including investments, equals HK$2.06/share, 66.8% of the share price. This provides room for higher dividend and highlight its value. </li>
</ul>



Lonking Holdings (3339 HK), as the leader in wheel loader, should see strong profit as industry sales grew 30% in Dec 2025 and 18.4% in FY25.
Export will be an important driver with the government's push for overseas expansion of high-end manufacturing. In FY25, industry export sales reached 51.5% of total. 
Net cash, including investments, equals HK$2.06/share, 66.8% of the share price. This provides room for higher dividend and highlight its value. 


Lonking (3339 HK): Another Great Year, with 67% of Share Price Is Net Cash

<ul>
<li>Despite a 15.4% post-result rally, <a href="https://www.smartkarma.com/entities/lonking-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3944:1" rel="noopener">Lonking Holdings (3339 HK)</a> remains inexpensive at 8.4x FY26F PER, with net cash equaling 68.8% of the share price.</li>
<li>Its exposure to higher oil prices and the Middle East war is limited, as sales are on an FOB basis, and none of these countries is among its top 10.</li>
<li>It targets a 15% revenue growth for FY26, and the 1Q26 trend is in line. Industry sales are encouraging in 2M26, with excavators grew 13.1% and loaders 27.9%.</li>
</ul>


Despite a 15.4% post-result rally, Lonking Holdings (3339 HK) remains inexpensive at 8.4x FY26F PER, with net cash equaling 68.8% of the share price.
Its exposure to higher oil prices and the Middle East war is limited, as sales are on an FOB basis, and none of these countries is among its top 10.
It targets a 15% revenue growth for FY26, and the 1Q26 trend is in line. Industry sales are encouraging in 2M26, with excavators grew 13.1% and loaders 27.9%.


Lonking (3339 HK): A Real Gem, Net Cash = 69% Market Cap

<ul>
<li>Industry sales of wheel loaders and excavators surged 16.5% and 27.2% in 2M25. For Feb alone, the growth rates are even more impressive at 34.4% and 52.8%, respectively.</li>
<li>Post-CNY, the utilisation hours and rates of construction machinery rose 70.3% YoY and 12.3pp. Market share gain in developing countries will drive exports.</li>
<li>Government supportive policies announced in NPC will provide support to demand. Current consensus forecasts for profit decline in FY25 are disconnected from industry data.</li>
</ul>


Industry sales of wheel loaders and excavators surged 16.5% and 27.2% in 2M25. For Feb alone, the growth rates are even more impressive at 34.4% and 52.8%, respectively.
Post-CNY, the utilisation hours and rates of construction machinery rose 70.3% YoY and 12.3pp. Market share gain in developing countries will drive exports.
Government supportive policies announced in NPC will provide support to demand. Current consensus forecasts for profit decline in FY25 are disconnected from industry data.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/lonking-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3944:1" rel="noopener">Lonking Holdings (3339 HK)</a>'s positive profit alert for 33-50% YoY increase in 1H24 earnings suggests that market consensus of just 10% full-year growth is way too conservative.  </li>
<li>Industry sales momentum for excavators and wheel loaders has accelerated in the last three months. A low base in 2H24 will mean an even stronger recovery.</li>
<li>Government supportive measures for equipment renewal and faster special purpose bond issuance will fuel demand too. We estimate net cash equals 90% of the share price. </li>
</ul>



Lonking Holdings (3339 HK)'s positive profit alert for 33-50% YoY increase in 1H24 earnings suggests that market consensus of just 10% full-year growth is way too conservative.  
Industry sales momentum for excavators and wheel loaders has accelerated in the last three months. A low base in 2H24 will mean an even stronger recovery.
Government supportive measures for equipment renewal and faster special purpose bond issuance will fuel demand too. We estimate net cash equals 90% of the share price. 


Lonking (3339 HK): Setting the Stage for Better Profitability

China

Lonking Holdings Limited is a major manufacturer and distributor of construction machinery, including wheel loaders, excavators, road rollers, forklifts, motor graders, and skid steer loaders. The company also develops and produces core components such as gearboxes, torque converters, axles, and hydraulic components. It was founded in 1993 and is headquartered in Shanghai, China.

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Lonking (3339 HK)

Lonking (3339 HK): A (Massive) Positive Profit Alert

Lonking's net profit reached Rmb1.02bn in FY24, a 57.8% growth. For 2H24, net profit surged 65.7%, with gross margin expanding 2pp. A final DPS of...

Osbert Tang, CFA

Lonking (3339 HK): A Real Gem, Net Cash = 69% Market Cap

Lonking remains undervalued at 8.4x FY26F PER with strong revenue growth targets and limited exposure to higher oil prices and Middle East...

Osbert Tang, CFA

Lonking (3339 HK): Boom, Boom, Boom

Sany Intl's net profit grew 23.2% in 1Q25, suggesting good momentum for the construction and heavy machinery demand. CCMA data also indicated that...

Osbert Tang, CFA

Lonking (3339 HK): Setting the Stage for Better Profitability

Lonking expects 1H24 earnings to grow by 33-50% YoY, signaling a much stronger full-year performance than market consensus. Industry sales...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Lonking (3339 HK): A (Massive) Positive Profit Alert

Lonking's net profit reached Rmb1.02bn in FY24, a 57.8% growth. For 2H24, net profit surged 65.7%, with gross margin expanding 2pp. A final DPS of...

Osbert Tang, CFA

Lonking (3339 HK): Another Great Year, with 67% of Share Price Is Net Cash

Just 8 days after our Insight, Lonking issued a FY25 profit alert for Rmb1,250-1,330m, 9-16% higher than the consensus. Key reasons are strong...

Osbert Tang, CFA

Lonking (3339 HK): A Real Gem, Net Cash = 69% Market Cap

​Lonking remains undervalued at 8.4x FY26F PER with strong revenue growth targets and limited exposure to higher oil prices and Middle East...

Osbert Tang, CFA

Lonking (3339 HK): Boom, Boom, Boom

Sany Intl's net profit grew 23.2% in 1Q25, suggesting good momentum for the construction and heavy machinery demand. CCMA data also indicated that...

Osbert Tang, CFA

Lonking (3339 HK): Setting the Stage for Better Profitability

​Lonking expects 1H24 earnings to grow by 33-50% YoY, signaling a much stronger full-year performance than market consensus. Industry sales...

Osbert Tang, CFA

Lonking remains undervalued at 8.4x FY26F PER with strong revenue growth targets and limited exposure to higher oil prices and Middle East...

Lonking expects 1H24 earnings to grow by 33-50% YoY, signaling a much stronger full-year performance than market consensus. Industry sales...