SANY(600031) Soochow Securities·2024-11-25 06:45Investment Rating - The report maintains a "Buy" rating for SANY Heavy Industry [1] Core Views - The domestic demand is expected to improve, benefiting leading manufacturers like SANY Heavy Industry, which is anticipated to have significant profit elasticity during the upcoming upcycle [4][49] - The recovery of the construction machinery sector is driven by fiscal and monetary policies that support infrastructure and real estate, leading to marginal improvements in downstream demand [3][4] Summary by Sections 1. Domestic Demand Recovery & Leading Product Structure - The earth-moving machinery sector, including excavators and loaders, is expected to recover first due to its early involvement in large construction and infrastructure projects [2] - The recovery of cranes and concrete machinery is anticipated to begin in 2025, as these sectors are closely tied to real estate and infrastructure, which are currently in a bottoming phase [2][40] - SANY Heavy Industry has a comprehensive product range in excavators, covering weights from 1.9 to 260 tons, with a strong focus on mid-to-large excavators, which are expected to yield significant profit during the upcycle [4][39] 2. Earnings Forecast and Investment Recommendations - The report forecasts SANY's net profit for 2024, 2025, and 2026 to be 62.84 billion, 84.94 billion, and 113.21 billion yuan respectively, with corresponding P/E ratios of 23, 17, and 13 times [1][49] - The report emphasizes that the ongoing fiscal and monetary policies will likely enhance domestic demand, leading to improved profit margins for leading companies in the construction machinery sector [4][49]