SANY(600031) Guotou Securities·2024-05-09 14:00Investment Rating - The investment rating for SANY Heavy Industry is "Buy - A" with a target price of 20.17 CNY for the next six months [4]. Core Views - SANY Heavy Industry's revenue for 2023 was 74.02 billion CNY, a decrease of 8.44% year-on-year, while the net profit attributable to shareholders was 4.53 billion CNY, an increase of 5.53% year-on-year [1]. - The company has maintained a strong market position in the domestic market, holding the largest market share in 13 key product categories, including large excavators, and has seen continuous growth in international markets [1][2]. - The company's gross margin improved to 27.72% in 2023, up 3.7 percentage points year-on-year, indicating enhanced profitability driven by product and market structure optimization [3]. Summary by Sections Financial Performance - In Q1 2024, SANY Heavy Industry achieved a revenue of 17.83 billion CNY, a slight decrease of 0.95% year-on-year, with a net profit of 1.58 billion CNY, up 4.21% year-on-year [1]. - The overall gross margin for 2023 was 27.72%, with a net margin of 6.3%, reflecting a stable operational quality [3]. - The company reported a significant increase in operating cash flow, reaching 5.7 billion CNY in 2023, a 39% increase year-on-year [3]. Product Performance - Excavators generated approximately 27.6 billion CNY in revenue in 2023, down 23% year-on-year, while Q1 2024 revenue was about 7.05 billion CNY, up 2.8% year-on-year [2]. - Concrete machinery revenue was around 15.3 billion CNY in 2023, up 2% year-on-year, maintaining the global market leader position [2]. - Crane revenue reached approximately 13 billion CNY in 2023, with a year-on-year increase of 3%, and Q1 2024 revenue was about 3.24 billion CNY, also up 2% year-on-year [2]. Market Outlook - The report anticipates that SANY Heavy Industry will achieve revenues of 80.98 billion CNY, 91.31 billion CNY, and 106.06 billion CNY for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 9.4%, 12.8%, and 16.1% [7]. - The net profit for the same years is projected to be 5.83 billion CNY, 7.58 billion CNY, and 10.37 billion CNY, with growth rates of 28.7%, 30.0%, and 36.9% [7]. - The company is expected to benefit from a recovery in the domestic market and continued growth in international markets, enhancing its long-term growth potential [7].