20221102-招银国际-三一国际-00631.HK-Key_takeaways_from_post-results_call_and_NDR_5页_1019kb

SANY International (631 HK) Summary

Core Content and Key Highlights

SANY International (631 HK) reported strong performance in the post-results call and NDR, with a solid backlog of RMB8.8bn, representing a 26% increase compared to August. The company maintains a BUY rating, with a revised target price of HK$13.20, reflecting the recent RMB depreciation.

Main Segments and Performance

• Road Header:

  • Sales volume in 9M22 grew by over 50%.
  • ASP increased to RMB3.4mn/unit, driven by larger and more intelligent machines.
  • Segment revenue reached RMB2.28bn, up ~67% YoY.
  • Full year target for 2022E is RMB3.2bn.

• Combined Coal Mining Machinery (CCMU):

  • Segment revenue grew ~70% YoY to RMB2.2bn, led by the growth in hydraulic support product.
  • Full year targets for 2022E and 2023E are RMB2.6bn and RMB3.0bn respectively.

• Mining Trucks:

  • Segment revenue doubled YoY to RMB2.17bn, driven by both domestic and overseas markets.
  • SANYI expects continued high growth in 2023E due to strong overseas demand.

• Port Machinery:

  • Segment revenue grew 35% YoY to RMB3.4bn, mainly due to overseas demand.
  • Large-size machinery backlog is expected to cover capacity in 2024E.

• Smart Mining Solutions:

  • Revenue of RMB150mn was recognized in 9M22.
  • Targets for 2022E and 2023E are RMB200mn and RMB500mn for underground mining.
  • Open cut mining revenue is not significant in 9M22 but expected to reach RMB150mn in 2023E.

• Robotics:

  • Segment revenue remained largely stable YoY at RMB670mn.
  • Business is in developing stage with a focus on external clients.
  • External orders are increasing, particularly from power cables and new energy industries.
  • Full year revenue is expected to remain stable YoY.

Earnings Summary

Financial Ratios

• Gross Margin: 22.2% in 3Q22, narrowed YoY and QoQ due to large size port machinery and production bottlenecks.
• EBITDA Margin: 21% in FY20A, 17% in FY21A, and 15% in FY22E.
• EBIT Margin: 17% in FY20A, 15% in FY21A, and 13% in FY22E.
• Net Profit Margin: 14% in FY20A, 13% in FY21A, and 11% in FY22E.
• ROE: 14% in FY20A, 15% in FY21A, and 18% in FY22E.
• Current Ratio: 1.5 in FY20A, rising to 1.7 in FY24E.
• Receivable Turnover Days: 147 in FY20A, decreasing to 118 in FY24E.
• Inventory Turnover Days: 110 in FY20A, slightly increasing to 102 in FY24E.
• Payable Turnover Days: 160 in FY20A, remaining stable at 170 in FY24E.

Share Performance

• Market Cap (HK$ mn): 21,191
• Avg 3 mths t/o (HK$ mn): 14.67
• 52w High/Low (HK$): 8.93/6.40
• Total Issued Shares (mn): 3,154
• Free Float: 32.3%

Key Risks

• Weakness in mining activities
• Higher-than-expected expenses for new products
• Rebound of raw material costs and freight rates

Analyst Rating and Target Price

• Rating: BUY (Maintain)
• Target Price: HK$13.20 (Previous: HK$14.60)
• Price Performance: 12-month price performance shows a 96% upside from current price of HK$6.70

Shareholding Structure

Conclusion

SANY International continues to benefit from the mining capex cycle, transformation to intelligent and electric products, and strong overseas demand. The company's revenue and profit growth remain robust, supported by strong backlogs and efficient operations. Despite some challenges in gross margin due to production bottlenecks, the overall financial performance and growth outlook remain positive. The BUY rating reflects confidence in the company's ability to deliver strong returns over the next 12 months.