Investment Rating - The report maintains a BUY rating for SANY International with a new target price of HK6.99 [2][5]. Core Insights - SANY International's 1Q24 net profit declined by 21% year-over-year (YoY) to RMB516 million, which was worse than the expected decline of 15% YoY. This decline was primarily due to weak performance in mining equipment and emerging industries, despite growth in logistics equipment [2]. - The report anticipates an improving trend for SANY International, driven by the reduction of losses following the disposal of its robot business, strong overseas demand for wide-body trucks and large mining trucks, and potential acceleration in port equipment orders in the second half of 2024 due to government policies [2]. - Adjustments to earnings forecasts for 2024E and 2025E have been made, with a decrease of 5% and 2% respectively [2]. Financial Performance Summary - 1Q24 revenue decreased by 6% YoY to RMB5.1 billion, with mining equipment revenue falling by 26% YoY to RMB2.8 billion, while logistics equipment revenue increased by 23% YoY to RMB1.8 billion [2][8]. - The gross profit margin for 1Q24 was reported at 24.9%, slightly up from 24.5% in 1Q23, indicating improved efficiency despite lower revenue [8]. - For the full year, SANY International targets to deliver 3-4GW of solar modules and complete 800MW of EPC projects, although losses in the solar power segment are expected to continue due to declining supply chain pricing [2]. Market Outlook - The domestic logistics equipment sector is expected to benefit from an equipment upgrade policy, with major ports in China planning to replace small diesel port machinery with electric models [2]. - SANY International has seen promising overseas growth, particularly in wide-body trucks, with a target of 1,800 units for the full year, translating to approximately RMB2.6 billion in sales [2]. - The company remains optimistic about the domestic mining equipment market, projecting a growth range of 0-5% for 2024E, despite overall industry challenges [2].
三一国际：Expect an improving trend after a weak 1Q24