Core viewpoints

In the first half of 2023, the company achieved rapid growth driven by the rapid growth of overseas business, electrification, continuous cashing of intelligent logic and the injection of emerging business, and its profitability was improved due to the optimization of product structure and reduced pressure on the cost side. Looking ahead, the core competitive advantage of the company's traditional business is solid, the internationalization trend of mine car (wide-body car, rigid mine card), Dagang machine and Xiaogang machine business is still relatively obvious, and the emerging business is ready to open up long-term growth space.

Event

According to the semi-annual report released by the company in 2023, the company achieved operating income of 10.894 billion yuan in the first half of the year, an increase of 42.30% over the same period last year, a net profit of 1.202 billion yuan, an increase of 32.70%, and a net profit of 973 million yuan, an increase of 38.78%. Q2 realized operating income of 5.456 billion yuan in a single quarter, an increase of 54.12% over the same period last year, and a net profit of 552 million yuan, an increase of 19.49% over the same period last year.

Brief comment

Traditional business continues to remain competitive and profitability is significantly improved

In the first half of 2023, the company maintained its core competitiveness in traditional mining machinery and logistics equipment, roadheader, front crane and stacker firmly established its position as the first echelon in the industry, and fully mechanized mining and wide-body vehicles achieved rapid growth under the promotion of intelligence and internationalization. The newly merged oil equipment and new businesses (lithium power equipment, solar modules and hydrogen production equipment) have contributed to the performance, of which oil equipment has contributed 340 million yuan in revenue since June 10, and high-quality assets have continued to make efforts after the merger.

In terms of business, ① revenue: in the first half of the year, mining equipment realized business income of 7.21 billion yuan, up 32% from the same period last year, accounting for 67% of total income; logistics equipment realized operating income of 3.07 billion yuan, an increase of 42% over the same period last year, accounting for 28% of total revenue; and oil equipment and emerging businesses achieved operating income of 340 million yuan and 220 million yuan, respectively, accounting for 3% and 2% of total income respectively. In terms of products, in the mining machinery sector, the total operating income of roadheader and fully mechanized mining is 3.23 billion yuan, an increase of 6% over the same period last year, that of wide-body vehicles is 2.2 billion yuan, an increase of 66% over the same period last year, and that of mining cards is 380 million yuan, an increase of 522% on a low base. In the logistics equipment sector, Dagang Machinery achieved business income of 810 million yuan, an increase of 32% over the same period last year, while Xiaogang Machinery achieved business income of 2.07 billion yuan, an increase of 47% over the same period last year.

② profit side: in the first half of the year, under the influence of the increase in the proportion of products with high gross profit margin, the implementation of cost reduction measures and the decline in sea freight prices, the company's comprehensive gross profit margin increased by 2.3pct to 26.1%.

From a business point of view, mining equipment achieved a gross profit margin of 26.2%, an increase of 2.0pct compared with the same period last year, in which the gross profit margin of the mining car plate increased to 23.0% due to the increase in the proportion of mining cards with high gross profit margin, and the gross profit margin of logistics equipment increased to 24.9%. Among them, Dagang Machinery benefited from the significant reduction in raw materials and sea freight costs, and the gross profit margin increased significantly by 9.4pct to 12.4%. In terms of expense rate, the company's sales expense rate, management expense rate and R & D expense rate are 4.9%, 2.0% and 6.9% respectively, with year-on-year changes-0.4pct, + 0.1pct and + 1.4pct, respectively. The increase in R & D expense rate is mainly due to increased research and development in smart mines, smart ports, self-driving, emerging businesses and oil and gas equipment.

With the rapid growth of overseas markets, electrified products are recognized by customers.

In the first half of 2023, the company continued to realize its international logic, with overseas operating revenue of 3.24 billion yuan in the first half of the year, an increase of 68% over the same period last year, and the proportion of total revenue increased to 29.9% by 4.7pct. In terms of business, overseas revenue of mining equipment increased 54% to 1.5 billion yuan over the same period last year, of which wide-body vehicle revenue was 990 million yuan, up 48% over the same period last year; logistics equipment realized overseas revenue of 1.8 billion yuan, an increase of 84% over the same period last year. Among them, Xiaogang Machinery increased its market share of electrified products by 96% to 1.41 billion yuan, and Dagang Machinery achieved revenue of 360 million yuan, an increase of 50% over the same period last year. With its leading technology in the field of electrification, the company continues to break through the high-end markets in Europe and the United States through electrified products. In the first half of the year, the operating income of electric mine cars reached 390 million yuan, an increase of 241 percent over the same period last year, and successfully sold to the Norwegian market; small port machines such as electric front cranes, stackers and cards achieved business income of 220 million yuan, an increase of 52 percent over the same period last year, and entered the four major international operators such as APMT and PSA. Looking ahead, the penetration of overseas wide-body vehicles is still in its infancy, and there is still plenty of room for the replacement of electric equipment by the six major international terminal operators, so the company has a strong driving force for follow-up growth in overseas markets.

The emerging business is full of bright spots, and Lithium hydrogen has a broad market.

The company's photovoltaic industry integration, hydrogen energy equipment, lithium equipment three kinds of emerging business rapid development, among them: ① photovoltaic industry integration: according to the official account released by Shifeng, since January 2023, the first high-efficiency module of the Sany silicon pilot test line was successfully removed, indicating that Sany Silicon can successfully break through the whole photovoltaic industry chain, and the company began to speed up the industrial layout. With investment in 5GW single crystal silicon construction projects and 5GW solar cell production projects in Shuozhou, Shanxi and Zhuzhou, Hunan, photovoltaic business is expected to achieve rapid expansion. ② hydrogen energy equipment: in the first half of the year, Sany hydrogen energy successfully won the bid for the world's largest green ammonia project-Jilin Da'an Fengguang integrated demonstration project of green hydrogen synthesis ammonia production. 8 sets of 1000Nm?/h hydrogen production equipment with a total order value of nearly 60 million yuan. ③ lithium electric equipment: the company's 1.5 million module PACK line project has been delivered to customers in the first half of the year, and the order includes two pilot production lines and one automatic production line, which are mainly used for 100AH and 280AH cells to produce household and industrial and commercial energy storage PACK, and the business begins to gradually expand to external customers. Looking ahead, the company's strategic planning is clear, gradually transforming from a traditional energy platform to an all-energy platform, opening the growth ceiling.

Investment suggestion: from 2023 to 2025, the company is expected to achieve operating income of 22.829 billion yuan, 30.001 billion yuan and 36.72 billion yuan respectively, an increase of 46.94%, 31.41% and 22.40% respectively over the same period last year, and a net profit of 2.43 billion yuan, 3.317 billion yuan and 4.075 billion yuan respectively, up 45.96%, 36.51% and 22.85% respectively over the same period last year, corresponding to PE of 15.76x, 11.55x and 9.40x respectively Maintain a "buy" rating.