SANY(600031) GOLDEN SUN SECURITIES·2024-09-25 00:08Investment Rating - The report gives a "Buy" rating for SANY Heavy Industry [3] Core Views - SANY Heavy Industry is positioned as a leading player in the domestic construction machinery market and is expected to become a global leader. The company has diversified its product offerings and geographical reach since its establishment in 1989, becoming a global leader in engineering machinery. Its product line includes excavators, concrete machinery, cranes, road machinery, and pile machinery, with active investments in new energy and electrification to promote sustainable development [1][17] - The domestic market is showing signs of recovery, with excavator sales having reached a low point last year, and recent monthly data indicating positive growth rates. The company is well-positioned to benefit from this recovery due to its strong distribution network and service capabilities [1][2] - The overseas market is expanding rapidly, with SANY's overseas revenue share exceeding 50% in 2023. The company has significant growth potential in high-end markets in Europe and the US, where its market share is currently low [2][19] Summary by Sections Domestic Market Outlook - The report indicates that the domestic construction machinery market is nearing a turning point, with improving marginal demand. Excavator sales fell to nearly 90,000 units last year, down from a historical high of nearly 300,000 units in 2020. However, recent monthly sales growth rates have shown positive trends, suggesting a recovery is underway [1][2] - SANY Heavy Industry maintains a strong market position with a well-established distribution network and excellent after-sales service capabilities, which enhances its resilience during market fluctuations [1][2] Overseas Market Potential - The report highlights the significant growth potential in overseas markets, with SANY's overseas revenue share increasing from around 10% in 2020 to over 50% in 2023. The company is expected to benefit from favorable conditions in the second half of the year, including the conclusion of elections and clearer policies [2][19] - SANY Heavy Industry leads the industry in terms of scale and profitability in overseas markets, with substantial opportunities for market share growth in both developed and developing countries [2][19] Financial Projections - The report forecasts that SANY Heavy Industry's total revenue will reach 813 billion, 954 billion, and 1,149 billion yuan in 2024, 2025, and 2026, respectively, with growth rates of 10%, 17%, and 21%. The net profit attributable to shareholders is projected to be 62 billion, 81 billion, and 105 billion yuan for the same years, with growth rates of 37%, 31%, and 30% [2][6] - The current price-to-earnings (P/E) ratios are projected to be 21, 16, and 12.2 times for the years 2024, 2025, and 2026, respectively, indicating a favorable valuation for investors [2][6]