20260323-招银国际-三一国际-00631.HK-Profit_in_2025_a_negative_surprise_Looking_for_improvement_in_2026_5页_642kb

SANY International (631 HK) Summary

Core Content and Overview

SANY International (631 HK) is a capital goods company that has announced its after-tax profit for 2025 is expected to grow by $50–73%$ YoY to RMB1.6–1.85bn, primarily due to a significant reduction in impairment losses. However, on a recurring basis (excluding impairment), the profit is forecasted to be $-10%$ to $+4%$ YoY to RMB-1.67 to -19.2bn, which is a negative earnings surprise. This is notably below both the analyst's estimate and the Bloomberg consensus. The earnings decline is attributed to one-off expenses related to port equipment and higher-than-expected operating expenses in the solar power business.

Despite the weak performance in 2025, the company is expected to have a strong start in 2026, driven by increased orders for mining trucks and improved visibility in the port equipment segment. Additionally, the oil & gas equipment segment is anticipated to benefit from the current high oil and gas prices. The company's target price is set at HK$20.60, based on a 20x 2026E P/E ratio, which reflects the rising earnings visibility from the commodity upcycle.

Key Financial Highlights (2022–2027)

Revenue Growth (YoY)

• 2022A: 52.4%
• 2023A: 30.5%
• 2024A: 8.0%
• 2025E: 12.1%
• 2026E: 21.1%
• 2027E: 16.9%

Adjusted Net Profit Growth (YoY)

• 2022A: 53.2%
• 2023A: 15.9%
• 2024A: (4.1)%
• 2025E: 23.6%
• 2026E: 30.8%
• 2027E: 23.3%

Earnings Per Share (EPS)

• 2023A: 0.58
• 2024A: 0.71
• 2025E: 0.92
• 2026E: 1.13
• 2027E: 1.13 (consensus)

P/E Ratio

• 2023A: 17.3
• 2024A: 30.5
• 2025E: 14.8
• 2026E: 11.4
• 2027E: 9.3

P/B Ratio

• 2023A: 2.9
• 2024A: 2.8
• 2025E: 2.5
• 2026E: 2.2
• 2027E: 1.9

Dividend Yield

• 2023A: 1.7%
• 2024A: 2.6%
• 2025E: 2.7%
• 2026E: 3.5%
• 2027E: 4.3%

Return on Equity (ROE)

• 2022A: 17.8%
• 2023A: 9.3%
• 2025E: 17.7%
• 2026E: 20.4%
• 2027E: 21.7%

Net Gearing

• 2022A: 21.2%
• 2023A: 17.4%
• 2024A: 12.3%
• 2025E: 6.7%
• 2026E: (2.3)%

Key Business Segments and Performance

Mining Trucks

• Mining trucks are expected to show strong growth in 2026, with revenue forecasted to reach RMB4,893mn, up from RMB4,100mn in 2025.
• Large-size mining trucks and wide-body trucks are also projected to grow significantly in 2026 and beyond.

Port Equipment

• Small-size port machinery revenue is projected to increase in 2026, and the company has improved visibility in this segment.

Oil & Gas Equipment

• The oil & gas segment is anticipated to benefit from rising commodity prices, contributing positively to the company's performance.

Solar Power

• Solar power revenue is expected to grow significantly in 2025 and 2026, though the growth rate may slow in 2027.

Lithium Battery

• Lithium battery revenue is on an upward trajectory, with notable growth in 2025 and 2026.

After Sales Service

• After sales service revenue is expected to grow steadily, showing a consistent increase from 2022 to 2027.

Risks

1. Weakening coal mining activities in China may impact the company's performance.
2. Slowdown in emerging businesses, particularly in the solar power and hydrogen segments, could affect future growth.
3. Cost inflation due to elevated commodity prices may put pressure on margins and profitability.

Analyst Rating and Target Price

• Rating: BUY
• Target Price (TP): HK$20.60
• Up/Downside: 72.2%
• Current Price: HK$11.96

Shareholding and Market Data

• Market Cap (HK$ mn): 38,645.7
• Average 3-month turnover (HK$ mn): 159.2
• 52-week High/Low (HK$): 15.97 / 4.42
• Total Issued Shares (mn): 3,231.2
• Shareholding Structure:
  • Sany Heavy Equipment: 64.9%
  • Free float: 33.9%

Share Performance (12-Month)

• 1-Month: -20.2%
• 3-Month: 43.2%
• 6-Month: 68.5%

Conclusion

SANY International is positioned to benefit from the commodity upcycle, particularly in the oil & gas and mining equipment segments. While the company faced a negative earnings surprise in 2025 due to impairment losses and one-off expenses, the outlook for 2026 is more positive with strong orders and improved visibility. The analyst maintains a BUY rating, suggesting potential for a return of over 15% in the next 12 months. However, risks such as weakening coal mining activities and cost inflation remain. The company's financial metrics, including P/E and P/B ratios, indicate a potential undervaluation based on 2026 earnings expectations.