Zhejiang Dingli’s (Dingli) EBIT in 2Q24 grew 72% YoY to RMB612mn, driven by revenue growth of 34% YoY and gross margin expansion of 2.6ppt YoY. Reported net profit grew only 2% YoY to RMB522mn, but largely a result of the reduction of net 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 unchanged full-year boom lifts sales target of 2k units. Besides, management expects the incremental impact of a potential increase in tariffs after the US presidential election should be manageable, as the reduction of anti-dumping duties could mitigate the impact. We have left our earnings forecast unchanged. Maintain BUY with unchanged TP of RMB75 (18x 2024E P/E, 1SD below the historical average of 31x).

Strong revenue growth and margin in 2Q24. Revenue grew 34% YoY to RMB2.4bn. Gross margin expanded 2.6ppt YoY to 31.8%. Administrative expense ratio remained relatively stable at 2.5%. Net finance expense dropped 96% YoY to RMB10mn due to the lack of FX gains.

Boom lift remains the growth driver. In 1H24, revenue from boom lifts surged 58% YoY to RMB1.8bn (representing 49% of revenue from main operations), while revenue from scissor lifts was flat YoY. Boom lifts reported growth in both overseas and China markets. For scissor lifts, capacity was allocated mainly to the overseas market due to fierce competition in China.

Overseas markets: US > Asia & others > Europe. Overseas revenue grew 50% YoY in 1H24. North America was the region with the highest growth (+100%), followed by Asia & others (+40%) and Europe (+10%).

Key risks: (1) Further intensified competition in China’s AWP market; (2) a slowdown of overseas demand; and (3) higher-than-expected anti-dumping duties and countervailing duties in the US and EU.