Third-Quarter 2025 Earnings Call November 6, 2025 BOARD PPT ------- Updated Mar 2025 Forward-Looking Statements Safe Harbor Statement Any statements contained in this presentation that are not historical facts are "forward-looking statements." These statements are based on the current expectations of the management of the Company, only speak as of the date on which they are made and are subject to uncertainty and changes in circumstances. R 237 G 28 B 42 R 255 G 212 B 32 R 207 G 207 B 207 R 117 G 128 B 134 ...

Sany Heavy (600031.SS) Earnings Review Summary Company Overview - **Company**: Sany Heavy Industry Co., Ltd. (600031.SS) - **Market Cap**: Rmb186.6 billion / $26.2 billion - **Industry**: Construction Machinery Key Financial Results - **3Q25 Net Profit**: Rmb1.92 billion (+48% year-over-year) [1][20] - **Topline Revenue**: Rmb21.32 billion (+10% year-over-year), which was 3% below expectations [2][20] - **Gross Profit Margin (GPM)**: 28.2% (+0.6 percentage points year-over-year) [20] - **EBIT Margin**: 10.8% (+2.0 percentage points year-over-year) [20] - **Net Profit Margin (NPM)**: 9.0% (+2.3 percentage points year-over-year) [20] - **Free Cash Flow**: Rmb3.59 billion (+5% year-over-year) [20] Sales Performance - **Domestic Sales Growth**: +10% year-over-year, lower than industry average of 20%+ [2][20] - **Excavator Sales**: Shift towards smaller-sized excavators, with small-sized units growing +26% year-over-year, while medium and large units saw lower growth [2][20] - **Overseas Sales Growth**: Sustained at approximately +10% year-over-year, with notable growth in Africa (+53%), Europe (+27%), and South America (+32%) [20][21] Management Insights - **Domestic Demand**: Management expressed optimism about recovery in non-excavator demand and expects solid growth in cranes driven by wind power and electrification [20][21] - **Mining Equipment Outlook**: Anticipated strong sales growth over the next three years, supported by an expanding after-market business [20][23] - **Order Management**: Sany proactively turned down approximately 1,000 units of orders from channels redirecting excavators to overseas markets [20] Future Guidance - **Overseas Sales Target**: Management aims for +15% year-over-year growth in overseas sales over the next three years [20][23] - **Mining Equipment Sales Projection**: Expected to reach Rmb3.5 billion in 2026 and Rmb6 billion by 2028 [20][23] Risks and Considerations - **Market Conditions**: Potential fluctuations in construction activities both domestically and globally could impact performance [27] - **Raw Material Prices**: Changes in steel prices may affect gross profit margins [27] - **Currency Fluctuations**: Variations in the RMB against foreign currencies could influence overseas business profitability [27] Valuation and Rating - **Current Rating**: Neutral - **12-Month Price Target**: Rmb22.00, implying a P/E of 21.0x for 2025E [1][26] - **EPS Growth**: Projected CAGR of +21% from 2025E to 2027E [26] Conclusion Sany Heavy's recent performance reflects a mixed outlook with strong overseas growth and a cautious domestic market. Management's focus on expanding market share and improving operational efficiency positions the company for potential growth, albeit with inherent risks related to market dynamics and external factors.

Core Viewpoint - Alta Equipment Group Inc. will report its financial results for the third quarter of 2025 on November 6, 2025, after U.S. market close, followed by a conference call and webcast to discuss the results [1]. Group 1: Financial Reporting - The financial results for the third quarter ended September 30, 2025, will be announced after the market closes on November 6, 2025 [1]. - A conference call and webcast will take place on the same day at 5:00 p.m. Eastern Time to discuss the financial results and answer questions [1][2]. Group 2: Company Overview - Alta Equipment Group Inc. is a leading provider of premium material handling, construction, and environmental processing equipment, operating one of the largest integrated equipment dealership platforms in North America [3]. - The company has a branch network of over 80 locations across various states in the U.S. and Canadian provinces, offering a wide range of specialized equipment and services [3].

Summary of Key Points from the Conference Call on China Construction Machinery Industry Overview - The conference call focused on the **China construction machinery industry**, with insights from **Ms. Yu**, a construction machinery expert from Construction Machinery Magazine - A **replacement-driven domestic upcycle** is expected to peak in **2027/28** [1][4][8] Core Insights - **Domestic Recovery Cycle**: The domestic recovery cycle is anticipated to last until **2028**, driven primarily by replacement demand [4][8] - **Overseas Demand**: Positive outlook on overseas demand, supported by a rate-cut cycle, urbanization in emerging markets, and market share gains of Chinese OEMs [4][12] - **Trends in Machinery**: The industry is shifting towards **electric, intelligent, and unmanned machinery** [1][8][14] - **Preferred Company**: **Sany Heavy Industry Co., Ltd.** is favored due to its strong domestic presence and successful globalization efforts [4][8] Sales Performance - **Excavator Sales**: In September 2025, domestic excavator sales increased by **10% YoY**, while exports grew by **5-10%** [9][13] - **Sales by Type**: - Small excavators saw a **29.3% YoY** increase - Large excavators experienced a **93.7% YoY** increase in exports, driven by overseas mining and infrastructure projects [9][10] Future Projections - **Sales Forecast for 2026**: - Domestic excavator sales are projected to grow by **10%** - Exports expected to grow by **5-10%** [13] - **Peak Sales Estimates**: Domestic excavator sales are expected to peak at **220-240k units** in 2027, primarily due to replacement demand [10][11] Competitive Landscape - **Strategic Differentiation**: Competition among leading Chinese OEMs is evolving towards strategic differentiation, with Sany leading in globalization and electrification [12][14] - **Market Challenges**: Chinese brands face challenges in developed markets due to strong local brand dominance and high capital expenditure requirements [12] Electrification and Innovation - **Electrification Trends**: Electrification is most advanced in wheel loaders, with expected market penetration of **30-40%** in the next 2-3 years [15] - **Opportunities in Intelligent Machinery**: Intelligent and unmanned machinery present significant opportunities for Chinese OEMs, particularly in mining [15] Risks and Considerations - **Upside Risks**: Stronger-than-expected infrastructure activities and overseas penetration could enhance growth [18] - **Downside Risks**: Weaker sales performance in overseas markets and intensified competition could pose challenges [18] Valuation Methodology - **Sany Valuation**: A target multiple of **23x** is applied to the 2026 EPS estimate for Sany, consistent with its historical P/E during previous upcycles [16] This summary encapsulates the key insights and projections regarding the China construction machinery industry, highlighting the expected growth driven by replacement demand and the strategic positioning of leading companies like Sany.

Manitowoc Company (MTW) FY Conference Summary Company Overview - Manitowoc Company is a crane manufacturer listed on the NYSE, founded in 1902, and has transitioned from a product-focused company to a customer-oriented business emphasizing aftermarket services [5][4][3]. Industry Context - The crane industry has faced a challenging cycle over the past decade, but there are indications that the market may be at or near the bottom of this cycle [1][2]. - The company is optimistic about the potential for growth driven by infrastructure spending and cyclical recovery in the crane market [13][14]. Financial Goals and Performance - Manitowoc aims to grow its revenue from $2.2 billion to $3 billion, with a significant focus on increasing non-new machine sales from approximately $650 million to $1 billion [4][29]. - The aftermarket business, which includes parts and services, is expected to be a major driver of EBITDA and return on invested capital (ROIC) [4][29]. Key Growth Drivers 1. **Secular Growth**: Increased infrastructure spending globally, particularly in the U.S. for electricity generation and data centers, is expected to drive demand for cranes [15][16]. 2. **Cyclical Recovery**: The European tower crane market is showing signs of recovery after a downturn, with increased housing needs in the UK and Germany [17][24]. 3. **Mergers and Acquisitions**: Successful acquisitions, such as the H and E crane business and Aspen equipment, have contributed positively to the aftermarket and overall revenue [27][28]. 4. **Organic Growth Initiatives**: Expansion of service locations and technician workforce to enhance customer service and support [39][37]. Market Dynamics - The company has noted a significant increase in the value per machine due to larger cranes being utilized, which has implications for revenue growth despite lower unit volumes compared to historical peaks [22][21]. - The impact of tariffs on steel and components is being closely monitored, as it could affect pricing and margins [49][52]. Strategic Focus - Manitowoc is committed to continuous improvement through initiatives like the "Manitowoc Way," which emphasizes operational efficiency and safety [9][11]. - The company is also focusing on enhancing its aftermarket services, which are less cyclical and provide more stable revenue streams [29][30]. Challenges and Considerations - The crane business is inherently cyclical, and while there are positive signs, the company remains cautious about predicting market turns [53]. - High leverage (around four times) is a concern, limiting the company's ability to engage in stock buybacks or further acquisitions until it is reduced [48]. Conclusion - Manitowoc is positioned for potential growth through strategic initiatives focused on aftermarket services, infrastructure spending, and cyclical recovery in the crane market. The company remains vigilant about market conditions and operational efficiency to drive long-term value [54][53].

Summary of Sany Heavy (600031.SS) Earnings Review and Analyst Call Company Overview - **Company**: Sany Heavy - **Ticker**: 600031.SS - **Market Cap**: Rmb179.5 billion / $25.0 billion - **Industry**: Advanced Materials & Construction in China Key Points from the Earnings Review 1. **Upgrade to Neutral**: Sany Heavy's rating was upgraded from Sell to Neutral following its 2Q25 results, which showed significant improvement in free cash flow (FCF) generation capability, achieving 1.5-2x net profit compared to a historical mid-cycle average of 1.2x [1][2] 2. **Operational Efficiency**: There was a better-than-expected improvement in operational efficiency, leading to a 5-6% increase in 2025E-27E EPS estimates, aligning with Wind Consensus [1][2] 3. **Shareholder Returns**: Sany is on track for a double-digit FCF yield in the coming years, with management indicating openness to higher payout ratios and share buybacks [1][2] 4. **Cyclical Setup**: The domestic cycle is turning upward, with emerging markets (EM) strength sustaining and signs of developed markets (DM) bottoming out, providing near-term support for share prices despite high earnings-based valuations [1][2] Financial Performance 1. **Revenue Growth**: Projected revenue growth for 2025E is Rmb88.7 billion, up from Rmb78.4 billion in 2024, with continued growth expected through 2027E [4][14] 2. **Earnings Estimates**: EPS estimates for 2025E have been raised to Rmb1.02 from Rmb0.97, with further increases expected in subsequent years [4][14] 3. **Free Cash Flow**: FCF is expected to reach Rmb14.8 billion in 2025E, indicating strong cash generation capabilities [14][29] Industry Demand Outlook 1. **Domestic Market**: The excavator market saw approximately 20% year-over-year (yoy) growth, with management noting volatility in monthly trends. The growth is attributed to a domestic cycle inflection and increased electrification in construction machinery [18][19] 2. **Overseas Sales**: Overseas sales growth moderated to high single digits (HSD%) yoy in 2Q25, primarily due to weak concrete machinery sales. However, excluding these impacts, European sales would have shown a 30% yoy increase [19][21] 3. **Product Segments**: Strong sales were reported in dump trucks and port machinery, with dump truck sales reaching Rmb2.6 billion in 1H25, a 95% yoy increase [19][21] Management Guidance and Outlook 1. **Future Growth Drivers**: Management expects continued growth driven by labor substitution for small-sized excavators and demand from mega infrastructure projects [20][22] 2. **Market Recovery**: There is confidence in recovering net profit margins (NPM) to previous cycle peak levels, supported by increasing overseas sales and stringent expense control [22][24] 3. **Shareholder Return Policy**: Sany intends to maintain a 50% payout ratio and is considering share buybacks to enhance shareholder returns [22][24] Risks and Considerations 1. **Market Volatility**: Risks include stronger or weaker-than-expected construction activities globally, which are critical for demand in construction equipment [25][34] 2. **Raw Material Prices**: Fluctuations in raw material prices, particularly steel, which constitutes about 85% of Sany's cost of goods sold (COGS), pose a significant risk [25][34] 3. **Global Trade Environment**: Changes in the global trade environment could impact Sany's ability to sell into key markets, particularly in Europe and North America [26][34] Conclusion Sany Heavy is positioned for growth with improved operational efficiency and strong FCF generation. The company is navigating a favorable cyclical environment, with management focused on enhancing shareholder returns while addressing potential risks in the market. The upgrade to Neutral reflects confidence in Sany's ability to sustain growth and profitability in the coming years [1][35]

Financial Performance - Q2 2025 - Net sales reached $540 million[17] - Adjusted EBITDA was $26 million[17] - Orders totaled $454 million[17] - Non-new machine sales increased by 10% year-over-year, reaching $162 million[13] Market Conditions - North America is experiencing a market on hold due to tariff-related uncertainty, but with high fleet utilization and declining dealer inventory[20] - Asia Pacific is seeing prolonged weakness in China, but improving sentiment in South Korea and mixed results in Australia[20] - Europe has varying market sentiment depending on the country, with new government stimulus programs and increasing residential permits[20] - The Middle East shows robust market demand driven by major residential, data center, and stadium project activity[20] Full Year 2025 Guidance - Net sales are projected to be between $2.175 billion and $2.275 billion[47] - Adjusted EBITDA is expected to be between $120 million and $145 million[47] - Capital expenditures are estimated at $47 million, with $23 million related to the rental fleet[47] - Adjusted free cash flows are projected to be between $55 million and $85 million, excluding EPA payment[47]

Summary of the Conference Call on China's Construction Machinery Sector Industry Overview - The conference call focused on the **China construction machinery sector** and the potential impact of the **lower YTR hydropower project** on annual sales [2][3]. Key Insights 1. **Sales Impact Estimates**: - The lower YTR project could boost annual construction machinery sales by approximately **3-5%** under base case scenarios and **5-10%** under bull case scenarios, based on data from the **China Construction Machinery Association (CCMA)** [2][3]. - The total revenue for the sector is estimated at **Rmb800 billion**, with new equipment sales accounting for around **Rmb500 billion** [2]. 2. **Equipment Type Demand**: - **Concrete-related machinery** is expected to see the most significant increase in demand, with projections indicating it may account for **40%** of the total equipment share from the lower YTR project [3]. - Other equipment types are expected to have varying impacts: **earthmoving equipment** and **cranes** at approximately **20%** each, **tunnel boring machines (TBM)** at **5-10%**, and various auxiliary equipment at **10-15%** [3]. 3. **Procurement Cycles**: - The first wave of excavator procurement is anticipated in **2027/2028**, with a second wave driven by replacement demand expected in **2030/2031** [4]. - The main construction phase of the lower YTR project is projected to commence in **H226**, leading to a peak in excavator purchases during the first wave [4]. 4. **Trends in Equipment Requirements**: - There is a growing emphasis on **electrification**, **upsizing**, **digitalization**, and **premiumization** in construction machinery, which is likely to favor leading domestic players over smaller brands [7]. - The expert highlighted that most construction equipment for tunnel operations will likely be new energy models, focusing on mid- to large-sized equipment, particularly **30-60 ton** excavators [7]. Risks and Opportunities 1. **Downside Risks**: - Potential risks include slower-than-expected growth in property and infrastructure investment due to government policies, weaker replacement demand, and impacts from trade friction [12]. - Overcapacity issues may persist if smaller manufacturers do not exit the market promptly [12]. 2. **Upside Risks**: - Faster-than-expected growth in property and infrastructure investment, stronger replacement demand, and supportive policies for domestic brands could enhance market conditions [13]. - Stricter environmental protection policies may accelerate the exit of older machinery, benefiting leading brands [13]. Conclusion - The lower YTR hydropower project presents a significant opportunity for the China construction machinery sector, with expected increases in sales and procurement cycles. However, stakeholders should remain vigilant regarding potential risks that could impact growth and demand in the sector [2][12][13].

Investment Rating - The report maintains a positive outlook for the construction machinery sector, projecting a full-year growth of 15% for domestic excavator sales in FY25, despite short-term fluctuations in demand [2][3][6]. Core Insights - Domestic excavator sales experienced a decline in May due to a significant drop in medium excavators, but the overall upward trend in the industry is expected to continue until 2027/28 [2][3]. - Small excavators showed the fastest growth in May, while large excavators lagged behind, primarily driven by urban underground utility tunnel construction [2][3]. - The expert anticipates that wheel-loader growth may surpass excavators in 2025E, influenced by the rise of electric wheel-loader penetration [2][3]. - The report highlights that the price competition for medium excavators has intensified, while competition for small and large excavators remains milder compared to previous cycles [4][6]. Summary by Sections Domestic Demand - Domestic excavator sales are expected to fluctuate in the short term, with a rebound anticipated in June due to mid-year KPI pressures, although real demand may remain weak during the off-season [3][6]. - The expert forecasts a 5% year-on-year growth in H225E for domestic excavators, indicating a gradual recovery post-September [3][6]. Competitive Landscape - Price competition is more pronounced in the medium excavator segment due to lower brand concentration, while Tier-1 manufacturers focus on profitability [4][6]. - The report notes that as domestic brands enter the large and extra-large excavator segments, price cuts may become more significant in those areas [4][6]. External Demand - The impact of trade tensions on external demand is considered limited, with Chinese OEMs expected to continue gaining market share in overseas markets [6].

Financial Data and Key Metrics Changes - The company generated $471 million in revenue, a decrease of 5% year over year, while adjusted EBITDA was $22 million, down 31% year over year [4][20] - Orders totaled $610 million, representing a 10% increase from the previous year, with a backlog of $798 million [19] - Non-new machine sales reached $161 million, up 11% year over year, contributing to a trailing twelve months total of $645 million [20][34] Business Line Data and Key Metrics Changes - The Americas drove higher order intake, while European tower crane orders increased by 68% year over year, indicating a potential market recovery [19] - Non-new machine sales have shown significant growth, with a 70% increase over the trailing twelve months [34] Market Data and Key Metrics Changes - In North America, orders through third-party dealer channels increased by 35% year over year, reflecting a healthy industry environment [12] - European mobile crane orders were lower year over year but showed sequential improvement, while tower crane orders surged nearly 70% year over year [13][14] - The Middle East experienced a slight decline in orders, but deal activity remains strong, particularly in Saudi Arabia and the UAE [14][15] Company Strategy and Development Direction - The company is focused on its "Cranes plus 50" strategy, aiming to enhance aftermarket services and reduce cyclicality [28][35] - Investments in new products and a rental fleet are being made to better serve customers and capitalize on market recovery [30] - The company is adapting to the global trade reset and is committed to maintaining competitiveness through strategic actions [27][35] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about demand in North America and Europe, citing low dealer inventory levels and strong customer engagement [12][13] - The company is modeling $60 million in incremental costs due to tariffs but has plans to mitigate 80% to 90% of these costs [6][26] - The overall sentiment is that the current economic environment is challenging, but the company is well-positioned for recovery [35] Other Important Information - The company has integrated AI into its improvement processes, resulting in significant labor savings and efficiency gains [11] - The company has doubled its number of field service technicians globally to nearly 500, enhancing its aftermarket presence [34] Q&A Session Summary Question: Can you unpack the mitigation to the tariff numbers shared? - Management indicated that mitigations include price increases, alternative sourcing, and vendor cooperation, emphasizing that the situation is expected to be short-term [38][39] Question: How much of the tariff cost impact is from China? - Management noted that the tariff impact is a mix of various factors, including steel and aluminum tariffs, and did not provide a clear breakdown [41] Question: What is driving the increased demand in Europe? - Management attributed the demand increase to low dealer inventory and overall economic recovery, though caution was expressed regarding specific regional conditions [43][44] Question: Are higher costs for raw materials factored into the tariff impact? - Yes, higher costs for raw materials such as steel and aluminum are included in the estimated tariff cost impact [51] Question: What is the current momentum in the U.S. non-residential construction markets? - Management noted strong utilization and ongoing large projects, but emphasized the need for clarity on specific end markets [53][54] Question: What are the drivers behind the growth in non-new machine sales? - Growth is broad-based, with strong performance in used machines and European tower crane business, supported by expanding service capabilities [56][57]