Sany Heavy Industry (600031): 3Q19 results meet expected profitability and improve sustainability

Sany Heavy Industry (600031): 3Q19 results meet expected profitability and improve sustainability

The 3Q19 results were in line with our expectations. Sany Heavy Industry announced the first 3Q19 results of 2019: operating income of 586.

90,000 yuan, an increase of 42 in ten years.

9%; net profit attributable to parent company 91.

60,000 yuan, an increase of 87 in ten years.

6%, corresponding to a profit of 1.

09 yuan, in line with our expectations.

In the third 杭州夜网论坛 quarter, the company’s operating income and net profit attributable to its parent were 153.


10,000 yuan, an increase of 18 in ten years.

1% / 61.


  Excavators and concrete machinery maintained high growth, and hoisting machinery ran smoothly.

In the third quarter of 19, Sany Heavy Industry sold excavators 1.

10,000 units, an increase of 19 in ten years.

4%, we expect the 3Q19 company’s excavator business revenue to increase by more than 20%; 3Q19 company’s concrete machinery revenue is expected to increase by about 20%, of which domestic pump truck sales remain above 50% and exceed high growth; we expect 3Q19 company’s lifting machineryRevenue initially increased slightly, better than the industry level.

  Economies of scale grow and profitability is sustainable.

Due to the increase in the proportion of large and medium tonnage products, the gross profit margin of the company in 19Q3 was 33.

0%, an increase of 2 a year.

9ppt, which was basically flat month-on-month; the expense ratio tripled during 3Q.

6ppt, in which the R & D expense rate increases by 2 every year.

5ppt, due to the company’s expansion of core components and intelligent R & D.

The improvement in asset quality brought 3Q19 asset impairment losses down by 90% in a row, and the net profit margin in the third quarter of 19 increased by 4.

2ppt to 15.


  Net cash inflow from operating activities showed a net inflow.

The balance of the company’s accounts receivable at the end of the third quarter decreased by 7 compared with the end of the second quarter.

At 7 ppm, 3Q Company achieved a net operating cash inflow of 18.

50,000 yuan, considering that due to the increase in stocking, the purchase of goods in the third quarter, the cash payment of labor services increased for more than ten years, the inventory surplus increased by 9 compared with the end of the second quarter.

9 trillion, actual cash flow is better than this figure.

  The development trend of profit growth is deterministic, and the outlook remains relatively optimistic.

In the short term, in the fourth quarter, the sales volume of the excavator industry maintained double-digit growth, and the growth rate of the crane machinery industry turned positive. In 2019, we believe that the company’s concrete, excavator, and crane machinery business revenue will increase by more than 30%.Through the optimization of product structure, the company’s gross profit margin remained stable at a high level of about 33%.

Initially, we believe that the amount of infrastructure and real estate investment will achieve a small positive growth. The construction machinery industry will generally operate smoothly in 2020, and Sany Heavy Industry will continue to maintain faster growth than the industry through market share increase.

  Earnings Forecast and Estimates Due to the improvement of profitability, we slightly increase the company’s 2019/20 earnings per share forecast4.

5% / 7.

1% to 1.


62 yuan.

The company’s current consensus corresponds to October 2019/20.2/8.

6 times P / E, estimated to be reasonably low, and maintain Outperform rating.

Considering the upward revision of earnings forecast and the estimated switch to 2020, we raise the company’s target price by 11% to 18.

00 yuan, corresponding to 13 in 2019/20.


1x P / E, compared with the current consensus, there is 29% upside.

  Risk infrastructure and real estate investment growth was slower than expected, and industry competition intensified.