Coal mining machinery and logistics equipment are dual-driven to accelerate the deployment of emerging industries. The company's core business is mining equipment manufacturing and logistics equipment manufacturing. In recent years, it has accelerated the acquisition of the Group's core assets, entered the robotics, lithium battery equipment, petroleum fracturing equipment and other industries, and continued to expand its energy equipment layout. In 2022, the company achieved revenue/net profit of RMB 155.37/RMB 1,665 billion, YOY +52.4%/+32.2%, of which overseas revenue was RMB 4.222 billion, YOY +101.5%, accounting for 27.2% of total revenue.
Mining equipment business: A leading domestic supplier of heavy energy equipment, leading the pace of electrification and intelligence.
The company focuses on product research and development, and takes product intelligence and electrification as the strategic development direction. It is expected to benefit from maintaining a high level of domestic coal production and the acceleration of intelligent coal machines. Among them, the sales revenue of intelligent tunneling machines doubled in '22, and the market share reached 80%. In '22, the company achieved coal machine revenue of 9.89 billion yuan, YOY +73.1%. The growth rate was significantly faster than other leading companies in the industry, ranking in the top five in the industry for the first time. Accelerate the launch of new energy and large-tonnage mining vehicles, and the revenue and market share of wide-body vehicles continued to rise. Overseas sales revenue of wide-body vehicles increased sharply by 135.9% in 2022. Large-tonnage wide-body vehicles received batch overseas orders, and overseas sales revenue reached number one in the industry for the first time. In March 2023, the company's “Lighthouse Factory” project in Xi'an completed the launch of the first equipment. After the first phase is put into operation, the planned annual output value will reach 10 billion yuan.
Logistics equipment business: One of the largest domestic suppliers of complete port machinery equipment with the largest production tonnage, the most complete range and the most advanced technology. Sales of HAECO's electrified products have surged, and overseas markets have continued to expand. The company is one of the largest domestic suppliers of complete port machinery equipment with the largest production tonnage, the most complete range and the most advanced technology. It strives to become a technical leader in “complete, electrified, intelligent and unmanned” logistics equipment products.
The logistics equipment sector is mainly responsible for Sany Offshore, a wholly-owned subsidiary. Its front lifting products have had the highest share in the domestic market for 15 consecutive years. Adhering to the electrification development strategy, HAECO's sales of electrified products surged. Sales of electric products increased 265% year-on-year in 2022, with a market holding of more than 500 units. The products were sold to 23 provinces and mainstream terminals and operators such as Singapore and India. The logistics equipment sector achieved revenue of 4,594 billion yuan in 2022, YOY +39.3%, and CAGR of 29.1% in 2017-2022.
Emerging businesses: Continuously injecting high-quality assets such as robots, lithium batteries, petroleum, and hydrogen energy equipment, emerging businesses can be expected to grow in the future. In January '20, Sany Robotics was established to build three major business segments: smart warehousing and logistics (AGV, vertical warehouse), intelligent production line (robot integrated system), and intelligent forklift (lithium electric forklift). The sales volume in 21/22 was about 1,15/13 billion yuan, and the development momentum increased rapidly. In December '22, it acquired Sany Technical Equipment and completed the first 3GWh power lithium battery production line. It acquired Sany Petroleum Technology in April '23, and achieved operating revenue/net profit of 2,087 to 386 million yuan in '22, YOY +19.9%/+27%, ranking first in sales volume and market share for two consecutive years for vehicle fracturing equipment. In '22, Sany Silicon Energy and Sany Hydrogen Energy were established. Hydrogen Energy won the bid for the Daanji Electric and Wind Power Integrated Ammonia Synthesis Demonstration Project, and the business landscape continues to expand.
Profit forecasting and valuation. We believe that the company's mining and logistics equipment is growing steadily, and that the emerging business is expected to gain strength. We expect the company's net profit to be 22.72/29.33/3.419 billion yuan, EPS of 0.71/0.92/1.07 yuan, based on the comparable company's PE of 8 to 10 times in 24 years, converted according to the exchange rate of 1 HKD = 0.90722 yuan on March 20, 2024. The corresponding reasonable value range is HK$8.11 to 10.14. The first coverage gave it a “superior to the market” rating.
Risk warning. The price of equipment raw materials fluctuates. The growth of the company's emerging business fell short of expectations. The uncertainty of the external environment affects the expansion of overseas markets.