Sany Heavy Industry Co., Ltd. (600031): The company’s operating level is at its best in history. The post-industrial era is optimistic about the development trend of industry leaders.
Event: The company released its 2018 annual report, and the company achieved operating income of 558 in 2018.
22 ppm, an increase of 45 in ten years.
61%; net profit attributable to shareholders of listed companies 61.
160,000 yuan, an increase of 192 in ten years.
33%; net cash flow from operating activities 105.
27 ppm, an increase of 22 in ten years.
As of the end of 2018, the company’s total assets were 737.
7.5 billion, net assets attributable to shareholders of listed companies 314.
The company’s rapid growth in performance is mainly reflected in the strong growth in sales of construction machinery products and the company’s continuously improving management capabilities.
1) Guide products to increase global competitiveness and strong sales growth: In 2018, sales revenue of mining machinery was 192.
470,000 yuan, an increase of 40 in ten years.
8%. The domestic market has been the sales champion for eight consecutive years. Based on the company’s leading R & D and innovation capabilities, the company’s excavators have world-class quality and competitiveness; concrete machinery has achieved sales income of 169.
64 ppm, an increase of 34 in ten years.
64%, ranking first in the world.
Lifting machinery sales revenue reached 93.
470,000 yuan, an increase of 78 in ten years.
26%, the market height increased significantly; the sales income of pile machinery 46.
910,000 yuan, an increase of 61 in ten years.
00%, the market share continued to increase and ranked first in China; the average sales price of road machinery and other equipment achieved rapid growth, and the overall market share increased steadily.
2) The company’s operating capacity has been greatly improved and is at the best level in history: in terms of profitability, the company’s overall gross profit margin is 31.
12%, an increase of 1 unit per year; net sales margin is 11.
29%, up 5 per year.
In terms of cost control, the period fee subsidy is 15%.
02%, a significant decline of 5 per year.
In 2003, the sales expense ratio, management expense ratio, and financial expense ratio decreased by 2 compared with 2017.
2 per share, interest expenses are reduced by 13 per year.
24%, interest rate income increases by 2 every year.
In terms of asset quality, the turnover days of accounts receivable decreased from 174 days in the previous year to 126 days, the overdue amount increased, the overdue ratio of value sales was controlled at the lowest level in history; the inventory turnover ratio was 3 from the previous year.
Raised 87 times to 4.
In terms of capital structure, at the end of 2018, the company’s assets and liabilities were reorganized55.
94%, the financial structure is solid. 3) The company’s operating efficiency has improved and its risk control is good: In 2018, cash assets and quasi-cash assets exceeded the size of loans, achieving “positive savings and loans”.
Net cash flow from operating activities 105.
27 ppm, an increase of 22 in ten years.
91%, another record high.
Internationalization is accelerating, the company’s overseas presence and operating quality continue to increase at a high speed. In 2018, the company achieved international sales revenue of 136.
27 ppm, an increase of 17 in ten years.
29%, accelerated growth in the second half of the year, sales of 75.
35 ppm, an increase of 29 in ten years.
49%; the company’s overseas major regions continue to improve the quality of operations, Southeast Asia, Indonesia, Latin America and other eight overseas regions, Sany India, Sany Europe, Sany United States, such average price achieved rapid growth; the average price per capita in overseas marketsThe overall profit, the sales recovery rate, and the change and expansion of the external payment and inventory turnover rate have significantly reduced the sales expense ratio; the overseas market share has increased significantly, among which the overseas market for excavators has achieved rapid growth and the market share has continued to increase significantly.
On March 22, the official WeChat of the China Construction Machinery Industry Association ‘s Excavation Machinery Branch issued a “Reminder Letter on Risks of Improper Competition in the Chinese Excavation Machinery Industry Market”: reminding some manufacturing companies in the industry to blindly pursue market share and formulate business policies.Severe excessive competition, low down payment, zero down payment recurrence, escalating price wars, stigmatization among brands at sales recommendation meetings, and obtaining “rebate” rewards for completing “indicators” and so on.
These radical behaviors have never been the same as the chaos of 2009-2012, and even have a tendency to surpass them. These serious market behaviors will inevitably cause the rapid accumulation of market risks and seriously affect the healthy and sustainable development of the current mining market.
We analyze the company’s recent almost-decreased sales quality and promotion behavior, and the quality of customers and orders has not changed.
As a leader in the industry, after a five-year industry adjustment period, Sany has more meaningful risk control, placing cash flow, corporate liabilities, and inventory levels on business priorities.
Sany’s recent market value exceeded 1000 market value: the deep reason is that China has entered the post-industrialization period. 1) The country’s economy has gradually entered the post-industrialization period. From the perspective of per capita GDP and urbanization rate, it will gradually reach the 20th century by 2020.
2) Post-industrialization: Economic growth has slowed.
Entering the post-industrialization era, the developing countries’ economic growth is the next step. In the future, there is a long plan to promote the maintenance of medium and high speed operation.
3) Post-industrialization period: The industrial concentration in the stock economy has increased, and the profitability of leading manufacturing companies has increased.
Leading manufacturing companies have higher operating efficiency, increased operating costs, better brands and higher market share. Through the continuous expansion of ROE, profitability and stability are significantly improved, and the improvement of ROE will bringBetter stock market performance.
Construction machinery: Sales volume in early 2019 continues to exceed market expectations 1) Sales of construction machinery products continued to exceed expectations in January-February 2019. According to the China Construction Machinery Association, a total of 30,501 excavators were sold in January-February 2019, surpassingIncrease of 39.
Among them, 11,756 units were sold in January (ten years +10.
0%), February sales of 18,745 units (+68.
(7%) was much larger than expected.
2) According to the prediction model of Zhongtai Excavator, we expect that the sales volume in 2019 is expected to reach more than 210,000 units.
3) Core parts (hydraulic parts) are still in tight supply in 2019.
Downstream: Infrastructure underpins economy, investment growth rebounds, real estate is not pessimistic in 2019 1) Infrastructure investment growth rebounded at the bottom in early 2019.
From January to February 2019, the amount of completed infrastructure investment increased by 4.
3% bottomed out.
The macro economy is weakening, and the demand for infrastructure stability is expected to continue to rise.
Rural revitalization (infrastructure investment) extends the boom period of construction machinery.
2) Downstream real estate investment: In 2018, we initially exceeded expectations, and we do not need to be pessimistic in 2019.
In 2018, the total investment in real estate development nationwide reached 110.083 million yuan, a growth rate of 9 in ten years.
5%, the growth rate of development investment in January-February 2019 will further increase, with an annual increase of 11.
Excavator sales are expected to exceed 210,000 units in 2019, with a small increase each year, setting a new historical high 1) The peak replacement period may gradually disappear in 2020.
According to the prediction model of Zhongtai Excavator, we predict that the sales volume of excavator will reach 21 in 2019-2020.
09 million units.
2) Domestic core parts (hydraulic parts) are expected to continue to be in tight supply in 2019.
Investment suggestion: The company is a leader in China’s construction machinery industry. Excavators have continued to grow, and the concrete sector has clearly recovered.
It is estimated that the net profit in 2019-2020 is expected to exceed the highest peak in history (8.6 billion net profit in 2011)!
The company is expected to have a 天津夜网 net profit of 88 in 2019-2021.
300 million, PE is 11/9/8 times.
Future prospects are aligned with Caterpillar, a global leader in construction machinery (with a market value of more than 500 billion yuan).
Maintain “Buy” rating.
Risk reminders: Macroeconomic fluctuation risks; gradual industry rebound and ongoing risks; the growth rate of sales of major products gradually exceeds expected risks; infrastructure and real estate exceed expected risks.