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Tianfeng Securities: Sany Heavy Industry Buy Rating

March 14, 2019 08:48
Author: Zourun Fang Zeng Shuai

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  Industry Overview: 19Q1 excavator sales are expected to reach 25%, multiple factors strongly support the annual sales

In the 19-February period, the excavator industry sold 30,501 units, a year-on-year increase of +40%, and exports (including Hong Kong and Macao) 3,101 units, a year-on-year increase of +22.6%. Among them, the small digging accounted for more than half, and the middle digging accounted for nearly 2pct. Looking forward to March, under the influence of multiple factors such as the sharp decline of the Spring Festival, the impact of infrastructure infrastructure and the construction of new countryside, it is estimated that sales in March will be +15% year-on-year. Q1 total sales volume is expected to reach 75,000 units, and the growth rate is expected to reach 25%. , significantly exceeded the market expected at the end of 2018.

Looking forward to the whole year, we are not pessimistic. In 2019, the sales volume of excavators is expected to reach new heights: 1) In terms of environmental protection, the national standard IV will be implemented in 2020, while the excavation market share of national II and III emission standards will be 59.6% and 33.8% respectively. According to the calculation, 17-20 years is the centralized update period of excavators, and the annual renewal demand is more than 100,000 units; 3) In 2017, the overseas market share of excavators in China is less than 3%, and the space for improvement is broad. 4) From the construction point of view, the 2018H2 intensive infrastructure project began to enter the construction period, which strongly supported the sales of the excavator; 5) affected by the weather and the environmental protection and production factors of the two associations, and suppressed some demand in January and February, and the large excavation is expected to rebound. .

  Competition pattern: industry concentration has increased significantly, and competition for medium and large digging is expected to intensify

According to the industry structure, the localization rate of the excavator and the concentration of the industry continue to increase. In the first two months of 2019, the market share of domestic excavators reached 59.79%, which was 3.03pct higher than that of 2018. The industry CR4 accounted for 58.76%, CR8 accounted for 79.94%, and CR8 accounted for 80% in February.

In terms of sales structure, the competition for small excavation is relatively sufficient, and there is still room for improvement in the localization rate of the medium and large digging. As of the 18th year, the localization rate of small excavation is close to 70%, 54% in medium digging and 44.5% in large digging. Drawing on the competition pattern of small digging, the big digging in the next two years is expected to become a competitive force. Considering the difficulty of large digging techniques, Maointerest rateHigher, more R&D companies are expected to stand out and benefit leading companies.

  Sany Heavy Industry: The market share of the three major businesses increased more than expected, and the Belt and Road opened up the growth space, and the profit elasticity accelerated.

1) Excavator: The sales volume of large digging is obviously accelerated, which is expected to drive the hairinterest rateUpgrade. In the first two months, the market share of small digging, medium digging and large digging was 29.52%, 23.56% and 26.04%, which was 4.72pct, 2.87pct and 5.55pct higher than that of 2018. In the sales structure, the proportion of large excavation was less than 10 % rose to 14%, SY485H in the 40-ton market share of 24.6%, ranking first in the industry.

2) Crane: The development of the industry is still in the fast lane, and the market share of Sany City has increased significantly. Since November 18, the market share of truck cranes has increased to the second in the industry. In the past two months, 19 years ago, it still maintained a higher growth rate than the industry. The number of cranes with 2018H2 high-margin cranes has rebounded, which is expected to drive profit recovery.

3) Concrete machinery: The sales volume of the industry is in the fast lane, and the high growth of high-margin pump trucks drives the profit. It is estimated that the pumping industry will sell 5,000 units in 2018, with a growth rate of 40%+. In 2019, demand continues to sink, the rural market contributes new quantity, scale effect and product structure adjustment (increased proportion of high-margin pump trucks), and the gross profit rate of concrete machinery is expected to increase.

4) Global layout: Following the strategic layout of the Belt and Road, Indian companies are getting on the right track. The company has established production and R&D bases, warehouse outlets and service centers in more than 70 countries around the world, such as the United States and India, in order to fully impact the overseas market. At present, the Indian company's annualized income in 2018 exceeds 2 billion yuan, and its comprehensive strength is strong.

  profit predictionAnd investment rating:We believe that the three major businesses of the company are growing strongly, the overseas market is opening up the growth space and the profit level is expected to continue to increase, and the profit elasticity is accelerated. It is expected to return to the mothership from 2018 to 2020.Net profitThey were 6.25 billion, 9.3 billion (previous value of 7.54 billion) and 10.4 billion (previous value of 8.11 billion), corresponding to 10 times PE in 2019, and continued to be recommended.Maintain "Buy" rating.

  risk warning:Infrastructure projects fell below expectations, rainy weather continued to exceed expectations, and overseas markets expanded less than expected.

(Article Source:Tianfeng Securities)

                (Editor: DF358)

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