24H1 net profit grew steadily, and profitability continued to improve

Sany Heavy Industries 24H1 achieved operating income of 38.74 billion yuan, down 2.0% year on year; net profit to mother of 3.57 billion yuan, up 4.8% year on year; and earnings per share of 0.42 yuan. The net operating cash inflow was 8.44 billion yuan, a sharp increase of 2240.6% over the previous year. It was mainly affected by the company's increased repayment efforts, an increase in sales repayments and a decrease in purchase payments in the current period. 24H1's comprehensive gross profit margin was 28.2%, up 0.03 percentage points year on year; net profit margin was 9.4%, up 0.5 percentage point year on year. The company's profitability continues to improve, mainly due to factors such as rapid growth in overseas sales and promotion of cost reduction and efficiency measures.

The industry position remains leading, and demand for equipment renewal is expected to open up growth. 24H1's excavation machinery revenue is 15.21 billion yuan, up 0.4% year on year, and the global market share is steadily increasing; concrete machinery revenue is 7.96 billion, down 5.2% year on year, making it the number one brand in the world; lifting machinery revenue is 6.62 billion, down 10.1% year on year. Among them, the overall domestic market share of crawler cranes exceeds 40%, and the market share of large and medium-sized crawler cranes ranks first in the country The overseas market share of truck cranes, all-terrain cranes, and off-road cranes all increased significantly; revenue from pavement machinery was 1.58 billion, up 15.7% year on year; revenue from pile construction machinery was 1.17 billion, down 7.1% year on year.

According to the “Implementation Plan for Promoting the Renewal of Construction and Municipal Infrastructure Equipment” issued by the Ministry of Housing and Construction in March 2024, in the field of construction equipment, including equipment (vehicles) such as excavation, lifting, loading, concrete mixing, lifts, bulldozers, etc., it is necessary to update and eliminate equipment that has been in use for more than 10 years, high pollution, high energy consumption, severe aging and wear, and poor technology in accordance with the requirements of the regulations. As equipment renewal policies continue to advance, it is expected that old models of construction machinery will be cleared at an accelerated pace, thereby stimulating the growth in demand for construction machinery renewal.

Firmly promote the internationalization strategy and steadily increase profits in overseas markets

The company firmly promoted the internationalization strategy, and 24H1 achieved overseas revenue of 23.54 billion yuan, an increase of 4.8% over the previous year; overseas revenue accounted for 62.2% of the main business revenue. Among them, the Asia and Australia region was 9.17 billion yuan, up 2.6% year on year; the European region was 8.27 billion yuan, up 1.1% year on year; the American region was 3.79 billion yuan, down 4.2% year on year; and the African region was 2.31 billion yuan, up 66.7% year on year. 24H1's profitability in overseas markets increased steadily, and the gross margin of its main overseas business continued to increase by 31.6%, an increase of 0.6 percentage points over the previous year.

Maintain a “buy” rating

The company's net profit grew steadily. We maintained the 24-26 net profit forecast of 6.33/8.48/11.02 billion yuan, corresponding to 24-26 EPS of 0.75/1.00/1.30 yuan, respectively. The company's profitability continues to improve, and the overseas business still has broad room for growth, maintaining the company's “buy” rating.

Risk warning: industry competition increases risk, downstream sentiment downturn risk, overseas export risk