\u3000\u3000 Zhejiang Dingli Machinery Co.Ltd(603338) (603338)
Event: on February 16, the company issued an announcement on the progress of the anti-dumping and countervailing investigation on the mobile lifting operation platform imported from China by the U.S. Department of Commerce. The U.S. Department of Commerce announced the final result of the anti-dumping investigation, and the fully applicable anti-dumping duty margin rate (after adjusting the subsidy margin) was 31.54%.
The company is expected to deal with the final anti-dumping decision calmly. Up to now, the US Department of Commerce has announced the final findings of countervailing and anti-dumping investigations on mobile lifting platforms imported from China; The final tax rates of countervailing and anti-dumping are 11.95% and 31.54% respectively (the preliminary tax rates are 23.43% and 17.78% respectively); The final tax rates of countervailing and anti-dumping applicable to temporary work are 18.34% and 165.10% respectively (the preliminary tax rates are 4.09% and 275.06% respectively). The US International Trade Commission (ITC) has ruled on the threat of material damage to the countervailing investigation; The final anti-dumping duty order still needs to be issued and implemented after ITC makes a final determination of anti-dumping industrial injury. The final determination result of the fully applicable anti-dumping tax rate is higher than the preliminary determination result, but the overall “double anti” tax rate is 43.49%, which still has great advantages over the tax rates of other domestic brands such as temporary work (“double anti” tax rate 183.44%). The threshold for other domestic brands to enter the U.S. market will be greatly increased; In contrast, with the least pressure, it is expected to deal with it calmly, and its development in the North American market is expected to return to the right track. According to our calculation, if we only consider the impact of the “double anti” tax rate in the United States, this tax will affect the gross profit margin of Dingli’s business in the United States by 17 percentage points; If the impact of shipping cost and raw material cost is superimposed, assuming that the shipping price remains unchanged in 2022 and the steel price increases by 20% compared with 2020 (lower than 2021), the comprehensive impact on the gross profit margin of Dingli US business in 2022 will be 3 percentage points, and the impact is relatively limited. The company will also strengthen the development of non trade friction overseas markets; Strengthen cost control and continuously optimize the supply chain; To speed up the development of new products and reduce the impact on the company’s competitiveness.
The overseas market ushered in the turning point of recovery, and the company’s product strategy returned to overseas. With the gradual normalization of the epidemic in North America and the stimulation of U.S. infrastructure policies, the demand for aerial work platforms in North America is booming, and the supply of products is in short supply. North American leader jieerjie has been scheduled for production. After June 2022, Terex’s backlog of high-speed machines reached US $1.96 billion by the end of 2021, an increase of 136.8% compared with the end of 2020. Products in the North American market are in short supply, which will create a good demand environment for China’s export of aerial work platforms. In addition, the trend of electrification in the European market is obvious. According to the data of globalmarket insight, the sales volume of electric aerial work platforms in Europe accounted for more than 70% in 2020; The export of China’s electric products to the European market is expected to increase rapidly. In 2018, affected by the Sino US trade friction, the company was forced to shift its sales focus from overseas to China. In 2020, affected by the continuous spread of overseas epidemic, the proportion of the company’s overseas revenue further decreased. However, facing 2022, when the overseas market ushers in the turning point of recovery and the gradual implementation of “double anti” in the overseas market, it is undoubtedly the best choice for the company’s product strategy to return overseas. The strategic focus of this time is back overseas, which is quite different from the strategic connotation before 2018: first, brand awareness has been passively improved through the “double anti” survey; Second, the investment of R & D, sales and after-sales resources for overseas customers has been greatly enhanced; Third, the company has a deeper understanding of the overseas market, and can easily interpret the rules and formulate tactics of the North American market. In addition, in 2021, the company will raise an additional 1.5 billion yuan for the annual output of 4000 large-scale intelligent high-altitude platforms. After the project is completed, the company’s production capacity will be further improved, and its operating performance is expected to usher in a new round of high growth.
Maintain the “buy” rating. When the final anti-dumping decision is made, the tax rate applicable to the company is the lowest compared with other domestic brands, or it may become the main winner. At the current time point, we believe that the company has ushered in four inflection points: (1) the overseas market is facing the inflection point of recovery, among which the North American market will have high growth in 2022; (2) “Double anti” is gradually implemented, and the company may become the main winner; (3) The company’s product strategy has returned overseas, but the strategic connotation has undergone profound changes; (4) With the implementation of fixed increase, the company has entered a new round of production expansion cycle. We estimate that the net profit attributable to the parent company from 2021 to 2023 will be RMB 939 million, RMB 1409 million and RMB 1832 million respectively, and the corresponding PE will be 31.73, 21.15 and 16.26 times respectively. Maintain the “buy” rating.
Risk tips: the deterioration of overseas trade environment, intensified market competition, sharp fluctuations in raw material prices and shipping costs, and the promotion of raised investment projects is not as expected.
