External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

Zhejiang Dingli Machinery  L / Equity Bottom-Up

<ul><li>Over the weekend, Dingli announced that the net profit in 1H23E is expected to increase 40-60% YoY to RMB803-918mn.</li><li>This implies a record high quarterly net profit of RMB484-599mn in 2Q23E (up 28-58%), which we think is slightly better than expectations.</li><li>As highlighted in our report “Margin expansion in 23E; Volume growth in 24E” on 5 Jul, Dingli is a beneficiary of the decline in freight rate and steel cost, as well as the appreciation of foreign currency against RMB. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Over the weekend, Dingli announced that the net profit in 1H23E is expected to increase 40-60% YoY to RMB803-918mn.This implies a record high quarterly net profit of RMB484-599mn in 2Q23E (up 28-58%), which we think is slightly better than expectations.As highlighted in our report “Margin expansion in 23E; Volume growth in 24E” on 5 Jul, Dingli is a beneficiary of the decline in freight rate and steel cost, as well as the appreciation of foreign currency against RMB. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Zhejiang Dingli (603338 CH) – Record High Quarterly Profit in 2Q23E

Thematic (Sector/Industry)

<ul><li>We project Li Auto’s net profit to rise 27% QoQ to RMB 1.2bn in 2Q23E. Profitability in FY24E could also beat expectation on greater economies of scale.</li><li>Apart from its products, we like the Company’s high self-discipline in costs and business expansion even as it is much more resourceful than before.</li><li>We project Li Auto’s 2Q23E revenue to more than triple YoY to RMB 27.9bn, as its sales volume beat guidance.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We project Li Auto’s net profit to rise 27% QoQ to RMB 1.2bn in 2Q23E. Profitability in FY24E could also beat expectation on greater economies of scale.Apart from its products, we like the Company’s high self-discipline in costs and business expansion even as it is much more resourceful than before.We project Li Auto’s 2Q23E revenue to more than triple YoY to RMB 27.9bn, as its sales volume beat guidance.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

CMBI Research Focus List (July Edition) – Our best high conviction stock ideas

<ul>
<li>We believe the listing of Horizon Construction (9930 HK, BUY), the major customer of Dingli in China market, will enhance the visibility of Dingli’s AWP orders over the coming 1-2 years.</li>
<li>Besides, we expect Dingli to deliver accelerating sales volume growth in 2024E upon the commencement of smart factory with annual capacity of 4,000 units of AWP.</li>
<li>On the margin side, we expect Dingli to deliver meaningful gross margin expansion given the decline in freight rate and steel cost, as well as the appreciation of foreign currency against RMB.</li>
</ul>
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


We believe the listing of Horizon Construction (9930 HK, BUY), the major customer of Dingli in China market, will enhance the visibility of Dingli’s AWP orders over the coming 1-2 years.
Besides, we expect Dingli to deliver accelerating sales volume growth in 2024E upon the commencement of smart factory with annual capacity of 4,000 units of AWP.
On the margin side, we expect Dingli to deliver meaningful gross margin expansion given the decline in freight rate and steel cost, as well as the appreciation of foreign currency against RMB.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Zhejiang Dingli (603338 CH) – Margin expansion in 23E; Volume growth in 24E

<ul><li>Following a rally since early Feb, we believe the market has already priced in the upcoming recovery of machinery demand.</li><li>We see little upside potential in the near term, as (1) the recovery could be more seasonal (MoM) than structural (YoY), with sales of excavator (proxy for the sector) likely falling short of expectation in Mar; (2) We expect the strong credit growth will only translate into a moderate recovery of excavator demand this year (+10% YoY in our industry assumption).</li><li>Therefore, we are selective in our universe, and prefer only AWP (the only type of machinery that stands out by achieving 15% YoY growth in Jan). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Following a rally since early Feb, we believe the market has already priced in the upcoming recovery of machinery demand.We see little upside potential in the near term, as (1) the recovery could be more seasonal (MoM) than structural (YoY), with sales of excavator (proxy for the sector) likely falling short of expectation in Mar; (2) We expect the strong credit growth will only translate into a moderate recovery of excavator demand this year (+10% YoY in our industry assumption).Therefore, we are selective in our universe, and prefer only AWP (the only type of machinery that stands out by achieving 15% YoY growth in Jan). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Construction Machinery – Near-Term Recovery More Seasonal than Structural

<ul><li>We are turning more positive on the construction machinery &amp; heavy-duty truck (HDT) sector as we expect meaningful earnings recovery in 2023E (following the down-cycle since early 2021), underpinned by: (1) resilient overseas demand; (2) strong mining activities; (3) gradual reopening in China; (4) decline in freight rate and steel price.</li><li>Meanwhile, the supporting policies on property will serve as risk reduction factor for the sector.</li><li>Aerial work platform (AWP) is our most preferred subsector, followed by HDT, excavator and other machinery.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We are turning more positive on the construction machinery &amp; heavy-duty truck (HDT) sector as we expect meaningful earnings recovery in 2023E (following the down-cycle since early 2021), underpinned by: (1) resilient overseas demand; (2) strong mining activities; (3) gradual reopening in China; (4) decline in freight rate and steel price.Meanwhile, the supporting policies on property will serve as risk reduction factor for the sector.Aerial work platform (AWP) is our most preferred subsector, followed by HDT, excavator and other machinery.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Construction Machinery / HDT – 2023 Outlook

China

Zhejiang Dingli Machinery Co Ltd designs and manufactures industrial lifts. The Company's main products include scissor lifts and boom lifts. Zhejiang Dingli distributes their products worldwide.

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Zhejiang Dingli Machinery L (603338 CH)

Zhejiang Dingli (603338 CH) – Record High Quarterly Profit in 2Q23E

Over the weekend, Dingli announced that the net profit in 1H23E is expected to increase 40-60% YoY to RMB803-918mn. This implies a record high...

CMB International

CMBI Research Focus List (July Edition) – Our best high conviction stock ideas

We project Li Auto’s net profit to rise 27% QoQ to RMB 1.2bn in 2Q23E. Profitability in FY24E could also beat expectation on greater economies of...

CMB International

Zhejiang Dingli (603338 CH) – Margin expansion in 23E; Volume growth in 24E

We believe the listing of Horizon Construction (9930 HK, BUY), the major customer of Dingli in China market, will enhance the visibility of...

CMB International

China Construction Machinery – Near-Term Recovery More Seasonal than Structural

Following a rally since early Feb, we believe the market has already priced in the upcoming recovery of machinery demand.

CMB International

China Construction Machinery / HDT – 2023 Outlook

We are turning more positive on the construction machinery & heavy-duty truck (HDT) sector as we expect meaningful earnings recovery in 2023E...

CMB International

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