Investment Rating - The report maintains a "BUY" rating for SANY International with an unchanged target price of HK$8, indicating a potential upside of 24.8% from the current price of HK$6.41 [2][5]. Core Views - SANY International is expected to report a net profit decrease of approximately 15% year-on-year for 1Q24E, primarily due to reduced capital expenditure from miners, increased competition in certain product segments, and losses in the solar power segment. However, a recovery is anticipated in the second half of 2024, driven by improvements in the solar business and strong overseas demand for large mining trucks and telescopic handlers [2][3]. Financial Summary - Revenue for FY24E is projected to reach RMB 26,717 million, reflecting a year-on-year growth of 31.8% [4][19]. - Adjusted net profit for FY24E is estimated at RMB 2,131.3 million, with a growth rate of 10.5% compared to FY23A [4][19]. - The earnings per share (EPS) for FY24E is forecasted to be RMB 0.67, with a price-to-earnings (P/E) ratio of 8.8x [4][19]. Segment Performance - Mining equipment revenue is expected to decline by approximately 15% year-on-year due to decreased sales of coal mining equipment and a slowdown in wide-body truck sales, despite some growth in large-size mining trucks [3][4]. - Logistics equipment revenue is projected to grow by around 25% year-on-year, driven by strong demand for small-size port machinery and a solid backlog of large-size machinery [3][4]. - The solar power segment is anticipated to remain loss-making in 1Q24E, but the completion of certain projects may help mitigate losses in the future [3][4]. Market Context - The report highlights that the coal mining sector in China is experiencing a downturn, which is impacting SANY International's performance. However, the company is expected to benefit from strong overseas demand for its products, particularly in the mining and logistics sectors [2][3].
Expect an unexciting set of results in 1Q24E, potential recovery in 2H24E