Sany Heavy Industry (600031): Strong overall business growth

Sany Heavy Industry (600031): Strong overall business growth

Event: On August 30, 2019, the company released its semi-annual report for 2019.

From January to June 2019, the company achieved revenue of 433.

USD 8.6 billion, an annual increase of 54.

27%, net profit attributable to mother 67.

48ppm, an annual increase of 99.

14%, the highest level of profit in the same period in history, and realized a net profit of 68.

1.2 billion, an annual increase of 95.

61%.

The construction machinery industry has a high degree of prosperity, and the 2019HI company has achieved the best performance in history: benefiting from factors such as downstream infrastructure demand boost + national strengthening of environmental governance + equipment update demand growth + artificial substitution effects and other factors, the construction machinery industry continues to grow rapidly, and accordinglyIndustry associations predict that overall industry sales will increase by more than 10% in 2019.

Benefiting from the high prosperity of the construction machinery industry, the company’s revenue and profit levels in 2019H1 achieved the best performance ever.

Revenues from excavation machinery / concrete machinery / lifting machinery / pile machinery / road machinery / accessories were 159.

10/129.

23/85.

00/29.

64/12.

50/9.

4.8 billion yuan, an increase of 42.

56% / 51.

17% / 107.

24% / 36.

87% / 43.

87% / 24.

71%, gross margins 天津夜网 were 36.

84% / 29.

55% / 25.

83% / 44.

43% / 36.

49% / 31.

21%, a ten-year change -3.

92pct / 5.

76 points 1.

27 points / 7.

60 points / 4.

10 points / 8.

78pct, achieving strong growth across the board.

The concentration of the excavating machinery industry has continued to increase, and the company’s leader has added stability: 2019H1 company’s excavating machinery achieved operating income of 159.

1 billion yuan, an increase of 42.

56%.Since 2012, the construction machinery industry has continued to make in-depth adjustments, showing a trend of increasing market share to large enterprises. As a leading company in the domestic excavation machinery industry, until May 2019, the company gradually expanded its machine sales to 31,286 units.Based on sales estimates, the company’s market share of 无锡桑拿网 excavators has reached 25.

63%, ranking first in the domestic excavator sales industry for nine consecutive years, leading consolidation of the firm, benefiting from the trend of increasing industry concentration, the company’s excavation machinery business is expected to continue to grow rapidly.

The company’s R & D and innovation results are remarkable, and a number of new products are expected to consolidate its R & D advantage: the company’s R & D expenses for 2019H1 are 11.

8.9 billion yuan, an increase of 182.

9%, R & D expenses increased significantly.

The company actively promotes open research and development, introduces and upgrades simulation technology and other research and development work, launches SY415 remote control excavators, SY155U short-tail hydraulic excavators, unmanned road construction machines and other key new products, and continues to consolidate its research and development advantages.

As of the first half of 2019, the company has accumulatively applied for 8,923 patents and 7,289 authorized patents. The number of applications and authorizations ranks first in the domestic industry. The scientific research strength industry-leading fee control is effective. Profitability and asset quality have been significantly improved. The overseas market has grown steadily:In terms of fees, 2019H1 company’s period expenditures11.

80%, falling by 2 every year.

63pct, effective fee control.

The sales expenses / administrative expenses (including R & D expenses) / financial expenses are 30.

11ppm / 20.

97ppm / 0.

1.1 billion yuan, the expense ratio is 6.

94% / 4.

83% / 0.

03%, ten years change -2.

16pct / 0.

32pct / -0.

79 points.

In terms of profitability, gross profit margin for sales in 2019H1 is 32.

36%, an annual increase of 0.

72pct, net sales margin is 15.

99%, an annual increase of 3.

49 points, significantly improved profitability.

In terms of asset quality and operating capacity, the account receivables turnover rate of the company in 2019H1 was 1 from the same period of the previous year.

Raised 46 times to 1.

89 times, the amount of overdue transactions dropped sharply, and the inventory turnover rate was 2 from the same period last year.

Raised 24 times to 2.

74 times, the company’s net cash flow from operating activities was 75.

9.5 billion, an annual increase of 22.

1%, another record high.

In terms of overseas markets, benefiting from the national “Belt and Road” strategy, the overseas revenue of H1 2019 is 70.

2.6 billion yuan, an increase of 15.

34%, exports maintained a rapid growth rate, accounting for 16 of total revenue.

19%, Sany Indonesia, Trinity India, Trinity Europe, Trinity America and other overseas regions achieved homogeneous and rapid growth.

The gross profit margin of foreign markets reached 26.

80%, an increase of 1 per year.

20pct.

The internationalization strategy is advancing steadily.

Investment suggestion: In view of the high prosperity of the construction machinery industry, the company has achieved the best performance ever. According to model calculations, it is estimated that the net profit attributable to mothers in 2019-2021 will be 108.6.7 billion, 126.

00 billion, 139.

1.8 billion yuan, EPS is 1.

30 yuan, 1.

51 yuan, 1.

66 yuan, corresponding to PE is 11 times, 10 times, 9 times.

Risk Warning: The growth rate of investment in fixed assets is less than expected, uncertainty in the international market, exchange rate risk, and the risk of fluctuations in raw material prices