17 Jan 2019

Crosby Research: Sany Heavy Equipment (631 HK): Anticipating a good FY18

Yesterday, Sany Heavy issued a positive profit alert citing that the company expects its FY18 net profit to record a significant YoY growth. This strong surge in net profit is primarily attributable to: 1) demand for improvement and replacement of coal machinery equipment was strong in FY18, while the stability of coal machinery products was further improved through design and upgrade, this consequently led to the significant increase in the coal machinery equipment revenue of Sany Heavy last year; 2) driven by the strong demand for railway container transportation and  multimodal transportation coupled with the operation of the China-Europe Railway Express drove the use of container lifting equipment in the railway market, orders flow for Sany Heavy’s port machinery equipment registered a strong growth last year; 3) major breakthrough were achieved for its export sales for both energy machinery and the port machinery, as the company continues to expand its geographical footages last year and 4) on the back of better cost control, gross margin for coal mining products and large-size port machinery products was improved in FY18.