SANY(SH:600031) Guotou Securities·2025-05-06 11:29Investment Rating - The investment rating for SANY Heavy Industry is "Buy-A" with a target price of 23 CNY for the next six months, corresponding to a dynamic PE of 23X for 2025 [3][6]. Core Views - The company reported a total revenue of 21.177 billion CNY in Q1 2025, representing a year-on-year increase of 18.77%. The net profit attributable to shareholders was 2.471 billion CNY, up 56.4% year-on-year, indicating strong growth in performance [1]. - The demand for excavators has significantly increased, with sales reaching 61,400 units in Q1 2025, a year-on-year increase of 22.83%. Domestic sales rose by 38.25%, while exports grew by 5.49%. The demand for earth-moving machinery is improving, and the company is expected to enter a new upward cycle [1][2]. - The company has successfully implemented cost control measures, resulting in a gross margin of 26.84% and a net margin of 11.89% in Q1 2025, marking significant improvements in profitability [2]. Financial Performance Summary - Revenue projections for SANY Heavy Industry from 2025 to 2027 are 90.28 billion CNY, 106 billion CNY, and 125.35 billion CNY, with growth rates of 15.2%, 17.4%, and 18.3% respectively. Net profits are expected to be 8.51 billion CNY, 11.11 billion CNY, and 13.82 billion CNY, with growth rates of 42.3%, 30.7%, and 24.4% respectively [3][5]. - The company has shown a consistent increase in revenue over three consecutive quarters, with growth exceeding 10% [1]. - The net profit margin is projected to improve from 6.1% in 2023 to 11.0% in 2027, reflecting enhanced profitability [9][10].