机构:招银国际
研究员:Wayne FUNG
4Q23 results below expectations. Revenue declined 17% YoY to RMB17.9bn. Gross margin narrowed 1.9ppt YoY to 25.6%. EBIT was RMB698mn (-25% YoY), largely helped by a fair value gain of RMB602mn. Net profit dropped by 29% YoY to RMB480mn.
Slowdown of overseas revenue in 2H23. Overseas revenue in 2H23 (62% of SANY’s revenue) grew 4% YoY to RMB20.8bn (slowed from 36% in 1H23). In terms of region, Europe grew 15% YoY to RMB8.1bn (39% of overseas revenue). Asia Pacific (ex-China) remained stable at RMB7.6bn (36% of overseas). Both America and Africa revenue dropped 6% YoY in 2H23 (17%/7% of overseas).
Sluggish 1Q24 results. Revenue dropped 1% YoY while gross margin expanded 0.5ppt to 28.4%. Helped by lower R&D and administrative expense ratio, net profit grew 5% YoY to RMB1.58bn. On the positive side, operating cash flow improved significantly to RMB4.38bn (vs -RMB1.6bn in 1Q23).
Valuation. We revise up our TP to RMB14.8, based on 24x 2024E P/E which is equivalent to 0.5SD above the average of 20x since 2017 (previous TP: RMB12.3, based on 19x). We now apply an above average target multiple as we see initial signs of stabilisation of excavator sales in China’s market, and we expect a moderate recovery in 2025E.
Upside risk: stabilization of property investment in China; Downside risk: further slowdown of overseas demand.