Sany Heavy Industry Co., Ltd. (600031): Q1 results continue to be optimistic about the leader due to the upper limit of the notice Double-click

Sany Heavy Industry Co., Ltd. (600031): Q1 results continue to be optimistic about the leader due to the upper limit of the notice Double-click

Event: The company’s Q1 achieved revenue of 21.3 billion, above + 75%; realized net profit return to motherhood of 3.2 billion, interval + 115% (the performance forecast growth range is 100-120%, the actual close to the range margin); net non-return to motherhoodProfit 3.1 billion, previously + 150%.

Investment points Excavator’s share of high-end products has risen more than expected, cranes and concrete machines meet the peak of the Q1 excavator sales increase + 52%, significantly surpassing the industry 25% growth rate, Q1 excavator market share reached 26% (longer + 5pct), The market share of CUDA products was 26% and 27% respectively, and the average value increased significantly by 5pct.

We judge that the company’s market share of high-end products will continue to increase, and the optimization of product structure will bring about profit elasticity. At the same time, after the internal competition of CUDA products has significantly improved, overseas growth logic can be realized.

Cranes and concrete machines welcome the new peak, and construction started in April in good condition.

From January to February, the growth rate of truck cranes in the industry reached 60%, the company’s sales increased by + 88%, and its market share reached 26% (+ 4pct). The perfect product series can greatly enhance it.

We expect the company’s Q1 crane revenue growth rate to reach 150%, and concrete machine revenue growth rate of 70-80% (among which pump trucks doubled).

Cranes and concrete machines started well in April, and sales are expected to continue to exceed expectations.

The gross profit margin was affected by the reduction in interest rates, the net interest rate continued to increase, and cash flow improved significantly.

7%, one year -1.

2pct, we judge that it is mainly 杭州桑拿养生会所 due to forecasting the impact of scale reduction, scale effect + product structure optimization and advancement continue to improve the gross profit margin of excavators.

Net interest rate is 15%, +2 for ten years.

8pct, ROE 9.

7% per year + 4 pct, benefiting from good corporate expense management + scale effect.

The total expense ratio during the period is 12%, ten years -5.

6pct, of which the selling expense ratio is -2.

2pct, the financial expense ratio is reduced due to the decrease in exchange losses2.

9 points.

Q1 net cash flow was 3.8 billion, +47 in ten years.

5%, the company’s credit sales policy maintains strict trading conditions, good returns, and continuous improvement in operating quality.

Earnings forecast and investment grade: We raised the company’s net profit in 2019 to 10.1 杭州夜生活网 billion (originally 9.3 billion), and the net profit in 2020-21 was 11.5 billion and 12.5 billion, corresponding to PE of 10, 9, and 8 times.”Into” level.

We give a target valuation of 15 times PE, corresponding to a market value of 151.5 billion yuan and a target price of 18 yuan.

Risk reminder: Expected substantial growth rate of downstream infrastructure, increased competition in the industry and changes in profitability