Record high quarterly profit in 2Q23E_股票频道

（以下内容从招银国际《Record high quarterly profit in 2Q23E》研报附件原文摘录）
浙江鼎力(603338)
Over the weekend, Dingli announced that the net profit in 1H23E is expected toincrease 40-60% YoY to RMB803-918mn. This implies a record high quarterlynet profit of RMB484-599mn in 2Q23E (up 28-58%), which we think is slightlybetter 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 freightrate and steel cost, as well as the appreciation of foreign currency against RMB.Looking forward, we expect Dingli to deliver accelerating sales volume growthin 2024E upon the commencement of the smart factory. We maintain our TP ofRMB67, based on 23x 2023E P/E, on the back of 23% earnings growth in2024E. Our target multiple remains well below the historical average of 31x.Maintain BUY.
Reasons for the profit surprise in 1H23E. Dingli’s estimated net profit ofRMB803-918mn in 1H23E accounts for 58-62% of our full year forecast. Webelieve Dingli, with an estimated 50%+ of overseas revenue, recorded arelatively large fx gains given the weakness of RMB in 2Q23. Besides, weexpect a continuous expansion of gross margin due to the decline in freightrate and steel price. On the product side, the transformation of electric andintelligent AWP models helped expand the overseas market.
New capacity to drive growth in 2024E. The main construction work ofDingli’s new smart factory has recently been completed and themanufacturing equipment is now at the testing stage. The factory is mainlyfor the production of boom lifts (36-50 metres) and scissor lifts (33-36metres). We expect the factory will commence operation starting 2024E.
Earnings forecast unchanged. We expect the earnings in 2H23E will bedriven by a resilient export and potential recovery of China’s demand, inparticular after the listing of Horizon Construction (9930 HK, BUY), Dingli’smajor customer in China. That said, we do not expect a further sharpdepreciation of RMB to drive fx gains in 2H23E (versus a large fx gain in2H22). We maintain our forecast at the moment and will update ourassumptions after the release of the full set of 1H23 results in Aug.
Key risks: (1) Further intensified competition in China AWP market; (2)Unexpected slowdown of overseas demand; (3) sharp rebound of RMB rate.