SANY INTERNATIONAL(631.HK)：MINING TRUCK GAINING TRACTION; HIGHER EARNINGS FORECAST AND TP

Core Viewpoint - SANYI's share price has increased by 70% year-to-date, driven by strong market interest in mining equipment, particularly in the mining truck segment for open pit mines [1] Group 1: Mining Equipment Revenue - SANYI's mining equipment revenue accounted for approximately 40% of total revenue in the first half of 2025, with mining trucks contributing 37% of this segment [1] - The mining truck segment is expected to gain traction due to rising expectations on miners' capital expenditure growth, with opportunities for expansion into copper, gold, manganese, and lead applications [1] Group 2: Revenue Forecasts - The revenue from large-size mining trucks is forecasted to grow by 30% in 2026 and 38% in 2027, driven by both volume and average selling price (ASP) increases [2] - Large-size trucks are expected to maintain a higher gross margin, approximately 10 percentage points higher than wide-body trucks [2] Group 3: Earnings and Target Price - Earnings forecasts for 2026 and 2027 have been revised upwards by 3% and 9% respectively, with the target price increased to HK$20.6 based on a 20x multiple for 2026 [1] - The target multiple reflects rising earnings visibility due to the commodity upcycle and is considered reasonable compared to A-shares and major overseas peers trading at around 18x to 19x [1]