Sany Heavy Industry Co., Ltd. (600031): Continue to write a growth story and be optimistic about Davis Double click

Sany Heavy Industry Co., Ltd. (600031): Continue to write a growth story and be optimistic about Davis Double click

Event: The company’s revenue in the first half of 2019 was 43.4 billion, a half year + 54%; net profit attributable to its mother was 67.

500 million, ten years + 99% 北京夜生活网 (performance forecast is 6.5 billion-7 billion, in the middle of the range); net profit after deduction is 68.

1 billion, ten years + 96%.

Revenue and profit are the highest levels in history for the same period.

Among them, Q2 achieved revenue of 22.1 billion in a single quarter, an increase of 38% year-on-year, and net profit of 35.

3 billion, previously + 87%.

Key points of investment In the first half of the year, the business income increased significantly, benefiting from the industry’s continued high growth under the high base + the company’s market share increased, in terms of business, mining machinery revenue was 159.

100 million, previously +42.

6%, market share accelerated; concrete machinery revenue was 129.

200 million, previously +51.

2%; lifting machinery revenue 85 billion, +107 for the whole 上海夜网论坛 year.

2%; income from pile machinery 29.

600 million, previously +36.

9%; Revenue from road machinery 12.

500 million, previously +43.

9%.

Excavator business: It is expected that the industry’s sales volume will grow steadily and at a low speed in the second half of the year, and the increase in market share + optimization of product structure will bring the elasticity of excavator revenue.

Excavator sales in the first half of 201913.

70,000 units, which remains 14 at a high base.

3% growth, sales of Trinity 3.

50,000, previously + 32%, the growth rate is faster than the industry; market share from 23 in 2018.

1% increase by 2.

4 points to 25.

5%.

The digging of high-end products quickly replaced foreign countries, and the market share of Sany ‘s digging increased from January to May 5.

3 points.

From the perspective of the production schedule of core component manufacturers, the production schedule rebounded from August to September. It is expected that the sales volume of excavators will continue to increase in the second half of the year. We expect the industry sales growth rate to be 5-10%.The sales growth rate is 20-25%, and the increase in high-end product share corresponds to the growth rate of excavator revenue of about 25-30%.

Cranes and concrete machines, as a post-cycle variety, ushered in the peak of renewal, and the number of relay excavators increased.

The sales volume of truck cranes in the industry was 2 in the first half of the year.

30,000 units, a growth rate of about 50%, while Sany’s sales growth rate is nearly 60%.

According to our calculations, the peak period of crane replacement from 2019 to 2020 is estimated to be 3-4 million units per year, and the sales growth rate is expected to be more than 30% in 2019; pump trucks will enter the peak of the update from 2019 and it is expected that 2019The number of updates per year in -2021 is around 7000-9000 units, corresponding to a sales growth rate of more than 40% in 2019.

As a leader in cranes and concrete machinery, Sany will benefit from the increased concentration of the industry and is expected to grow faster than the industry.

The profitability has been significantly improved, the cost control has been strong during the period, and the scale effect has clearly benefited from the high level of operating quality. The company’s profitability has increased significantly, and the overall gross profit margin of the product is 32.

4%, ten years +0.

7pct; net interest rate is 16%, ten years +3.

5 points.

Among them, Q2 single quarter comprehensive gross profit margin was 33.

9%, an increase of 3 from Q1.2pct; net interest rate is 16.

4%, an increase of 0 from Q1.

8 points.

Expenses are well controlled, and the total of the three expense ratios is 11.

8%, down 2.

6pct, the lowest level in history.

In terms of business, the average gross profit margin of all samples except excavators showed different degrees of improvement, mainly benefiting from scale effects and product transformation and upgrading.

The gross margin of the excavator is slightly smaller. We judge that it is due to the fierce competition in the industry since 2019, especially the price of low-end small excavation products is obvious. According to our calculations, the small excavation revenue of less than 20 tons accounts for 30% of the company’s excavator revenue.It has a significant impact on the overall gross profit margin.

We believe that the expansion of the share of high-value products such as large excavations will continue to increase, and the gross profit margin of excavators will continue to be stable in the second half of the year.

The operating net cash flow reached a record high, and the asset quality continued to improve. In 2019H1, the operating net cash flow was 7.6 billion, an annual increase of + 22%, setting a new record high.

Accounts receivable turnover ratio from the same period last year.

Raised 46 times to 1.

89 times, the amount of overdue transactions dropped significantly, and the overdue rate of value-added sales was controlled at the lowest level in history; the inventory turnover rate was 2 from the same period last year.

Raised 24 times to 2.

74 times; until the end of H1, the company’s assets and liabilities re-53.

31%, the financial structure is very robust.

Overseas revenue is growing rapidly, and exports are becoming a new bright spot. In 2019H1, overseas revenue will reach 7 billion, +15 per year.

3%, accounting for 16% of total income.

Since 2018, the industry’s export volume of excavators has maintained a high growth rate. From January to June, the export of 12,335 units has been gradually extended, exceeding + 39%, while Sany’s growth rate is higher than the industry, and the growth rate is expected to be above 40%.

Earnings forecast and investment rating: We continue to maintain our views since the early days, and we are optimistic about China’s most globally competitive high-end equipment companies: optimization of high-end product structure + scale effect + high export growth will continue to bring performance flexibility, and global competitiveness is gradually realizedBring an estimated premium, bullish on the opportunity for the company Davis to double-click.

It is estimated that the company’s net profit for 2019-2021 will be 11.3 billion, 12.7 billion, and 13.7 billion, corresponding to PE, 10, 9, and 8 times, respectively, giving a “buy” rating.

We give a target assessment of 14 times PE in 2019, corresponding to a market value of 157.7 billion and a target price of 18.

8 yuan.

Risk warning: The actual growth rate of downstream infrastructure is higher than expected, and the intensified competition in the industry has led to a decline in profitability.