Boom lifts & US market remain the key drivers
浙江鼎力(603338)
Zhejiang Dingli’s (Dingli) EBIT in 2Q24 grew 72% YoY to RMB612mn, driven byrevenue growth of 34% YoY and gross margin expansion of 2.6ppt YoY. Reportednet profit grew only 2% YoY to RMB522mn, but largely a result of the reduction ofnet finance income due to the lack of FX gains. During the post results call,management reiterated the positive outlook for the US market, with an unchangedfull-year boom lifts sales target of 2k units. Besides, management expects theincremental impact of a potential increase in tariffs after the US presidentialelection should be manageable, as the reduction of anti-dumping duties couldmitigate the impact. We have left our earnings forecast unchanged. Maintain BUYwith unchanged TP of RMB75 (18x 2024E P/E, 1SD below the historical averageof 31x).
Strong revenue growth and margin in 2Q24. Revenue grew 34% YoY toRMB2.4bn. Gross margin expanded 2.6ppt YoY to 31.8%. Administrativeexpense ratio remained relatively stable at 2.5%. Net finance expensedropped 96% YoY to RMB10mn due to the lack of FX gains.
Boom lift remains the growth driver. In 1H24, revenue from boom liftssurged 58% YoY to RMB1.8bn (representing 49% of revenue from mainoperations), while revenue from scissor lifts was flat YoY. Boom liftsreported growth in both overseas and China markets. For scissor lifts,capacity was allocated mainly to the overseas market due to fiercecompetition in China.
Overseas markets: US > Asia & others > Europe. Overseas revenuegrew 50% YoY in 1H24. North America was the region with the highestgrowth (+100%), followed by Asia & others (+40%) and Europe (+10%).
Key risks: (1) Further intensified competition in China’s AWP market; (2) aslowdown of overseas demand; and (3) higher-than-expected anti-dumpingduties and countervailing duties in the US and EU.
