SANY(600031) Minsheng Securities·2024-10-10 13:10Investment Rating - The report maintains a "Recommended" rating for the company [4]. Core Views - The company is positioned to benefit from a recovery in the domestic engineering machinery industry, with a projected increase in valuation as the market stabilizes [3]. - The company has a strong international presence, with significant growth potential in overseas markets, where its current market share is relatively low [3][41]. - The acceleration of electrification in engineering machinery is expected to enhance the company's product offerings and revenue growth [3]. Summary by Sections 1. Industry Leadership and Domestic Demand - The company has established itself as a leader in the domestic engineering machinery sector, with a diverse demand structure and a recovery in traditional demand sources such as real estate and infrastructure [9][24]. - The current equipment update cycle is at a low point, with sales in the first half of 2024 showing positive year-on-year growth [3][31]. - The company has maintained its position as the top seller of excavators in the domestic market for 13 consecutive years, with a revenue share close to 40% [3]. 2. Global Market and Internationalization - The global engineering machinery market exceeds one trillion yuan, with the company having only an 8% share in overseas markets, indicating substantial growth potential [3][41]. - The company has expanded its international strategy, transitioning from product export to industrial export, and has established a comprehensive overseas market channel system [3][41]. - In the first half of 2024, the company achieved overseas revenue of 23.54 billion yuan, a year-on-year increase of 4.8% [3]. 3. Electrification of Engineering Machinery - The electrification of engineering machinery is accelerating, with the industry penetration rate exceeding 5% in 2024, and the company has launched over 80 new energy products in the first half of 2024 [3][3]. - Revenue from electrified products has grown significantly, from nearly 1 billion yuan in 2021 to 3.146 billion yuan in 2023, with a compound annual growth rate (CAGR) exceeding 77% [3]. 4. Financial Forecast and Investment Recommendations - The company is expected to see a recovery in revenue and profit margins, with projected net profits of 6.586 billion yuan, 8.067 billion yuan, and 10.127 billion yuan for 2024, 2025, and 2026 respectively [4]. - The report anticipates a valuation increase, with price-to-earnings ratios projected at 24x, 20x, and 16x for the respective years [4]. - The company is well-positioned to benefit from the anticipated recovery in the domestic engineering machinery market, which is expected to lead to an upward shift in industry valuation [3].