CROSBY Research – Sany Heavy Equipment (631 HK): Surging R&D costs pressured NP growth

17 May 2024

Sany Heavy announced its 1Q24 business update with revenue decreased by 5.7% YoY to Rmb5.2bn. Gross profit and net profit were down by 4.0% and 20.7% YoY to Rmb1.3bn and RMb515.7m in 1Q24, respectively. GPM edged up steadily by 0.4ppt to 24.9% in 1Q24. Sany has implemented cost reduction and efficiency improvement measures, and the blended GPM improved steadily. The company will continue its efforts in integrating its operating resources and optimizing its business structure.