Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Sany Heavy Industry / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sany-heavy-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:20183:1" rel="noopener">Sany Heavy Industry (600031 CH)</a>, aims to raise around US$1.5bn in its H-share listing.</li>
<li>Sany Heavy Industry was the world’s third largest and China’s largest construction machinery company in terms of construction machinery’s cumulative revenue from 2020 to 2024, according to Frost &amp; Sullivan.</li>
<li>In this note, we look at its past performance and other deal dynamics that might impact the listing.</li>
</ul>



Sany Heavy Industry (600031 CH), aims to raise around US$1.5bn in its H-share listing.
Sany Heavy Industry was the world’s third largest and China’s largest construction machinery company in terms of construction machinery’s cumulative revenue from 2020 to 2024, according to Frost &amp; Sullivan.
In this note, we look at its past performance and other deal dynamics that might impact the listing.


Sany Heavy Industries A/H Listing - Has Suffered Recently, Showing Signs of Stabilizing

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>SANY Heavy (SANY)’s net profit in 1H25 grew 46% YoY to RMB5.2bn (2Q25: +38% YoY), which is a strong set of results with major machinery products (except concrete) saw strong growth.</li><li>For the first time since 2017, SANY proposed interim dividend of RMB0.31/shr, implying a 50% pay-out ratio (similar to the full year in 2024).</li><li>We maintain our positive stance on SANY due to the replacement-driven upcycle of excavators, as well as further improvement of non-road machinery.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SANY Heavy (SANY)’s net profit in 1H25 grew 46% YoY to RMB5.2bn (2Q25: +38% YoY), which is a strong set of results with major machinery products (except concrete) saw strong growth.For the first time since 2017, SANY proposed interim dividend of RMB0.31/shr, implying a 50% pay-out ratio (similar to the full year in 2024).We maintain our positive stance on SANY due to the replacement-driven upcycle of excavators, as well as further improvement of non-road machinery.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SANY Heavy (600031 CH) - 2Q25 Profit +38% YoY with Interim Div; Solid Upcycle

<ul><li>We upgrade SANY Heavy to BUY after keeping our HOLD rating for &gt;30 months.</li><li>We are turning positive as we expect an earnings up-cycle in 2025E26E, driven by: (1) a speed-up of overseas growth across all types of machinery driven by emerging markets such as the Middle East and Africa (for details, please see our report “2025 Outlook: Emerging markets the key growth driver; China market to be stabilized” published on 9 Dec), (2) further improvement of domestic excavator demand on the back of the Chinese government’s steppedup policies and the replacement cycle, (3) effective cost control and capex discipline.</li><li>We revise up our earnings forecast by 14-21% in 2024E-26E, after incorporating our new industry assumptions. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We upgrade SANY Heavy to BUY after keeping our HOLD rating for &gt;30 months.We are turning positive as we expect an earnings up-cycle in 2025E26E, driven by: (1) a speed-up of overseas growth across all types of machinery driven by emerging markets such as the Middle East and Africa (for details, please see our report “2025 Outlook: Emerging markets the key growth driver; China market to be stabilized” published on 9 Dec), (2) further improvement of domestic excavator demand on the back of the Chinese government’s steppedup policies and the replacement cycle, (3) effective cost control and capex discipline.We revise up our earnings forecast by 14-21% in 2024E-26E, after incorporating our new industry assumptions. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SANY Heavy (600031 CH) - Riding on the Up-Cycle of Excavator + Overseas Expansion

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>Industry sales of wheel loaders and excavators surged 16.5% and 27.2% in 2M25. For Feb alone, the growth rates are even more impressive at 34.4% and 52.8%, respectively.</li>
<li>Post-CNY, the utilisation hours and rates of construction machinery rose 70.3% YoY and 12.3pp. Market share gain in developing countries will drive exports.</li>
<li>Government supportive policies announced in NPC will provide support to demand. Current consensus forecasts for profit decline in FY25 are disconnected from industry data.</li>
</ul>


Industry sales of wheel loaders and excavators surged 16.5% and 27.2% in 2M25. For Feb alone, the growth rates are even more impressive at 34.4% and 52.8%, respectively.
Post-CNY, the utilisation hours and rates of construction machinery rose 70.3% YoY and 12.3pp. Market share gain in developing countries will drive exports.
Government supportive policies announced in NPC will provide support to demand. Current consensus forecasts for profit decline in FY25 are disconnected from industry data.


<ul>
<li>After a poor FY22, 1H23 will stay challenging for <a href="https://www.smartkarma.com/entities/lonking-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3944:1" rel="noopener">Lonking Holdings (3339 HK)</a>. However, we expect pick-up in business momentum going forward, and export is a major growth driver.</li>
<li>Gross margin rebounded HoH and YoY in 2H22, and Lonking maintained good operating cost control. Recovery of equity market suggests potential big positive swing in investment income. </li>
<li>Including investment portfolio, 92% of the current market capitalisation is net cash, providing solid downside buffer. Its 6.5x PER, 9.2% yield and 0.52x P/B are very attractive valuations.</li>
</ul>


After a poor FY22, 1H23 will stay challenging for Lonking Holdings (3339 HK). However, we expect pick-up in business momentum going forward, and export is a major growth driver.
Gross margin rebounded HoH and YoY in 2H22, and Lonking maintained good operating cost control. Recovery of equity market suggests potential big positive swing in investment income. 
Including investment portfolio, 92% of the current market capitalisation is net cash, providing solid downside buffer. Its 6.5x PER, 9.2% yield and 0.52x P/B are very attractive valuations.


Lonking (3339 HK): Back to Attractive Zone

China

SANY Heavy Industry Co., Ltd manufactures and markets construction and engineering machinery and related parts. The Company produces and sells concrete pumps, concrete pump vehicles, road rollers, pavers, and other related products. Sany Heavy Industry markets its products worldwide.

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Sany Heavy Industry (600031 CH)

Sany Heavy Industries A/H Listing - Has Suffered Recently, Showing Signs of Stabilizing

Sany Heavy Industry (600031 CH), aims to raise around US$1.5bn in its H-share listing. The company has now filed its PHIP and will look to launch...

Sumeet Singh

SANY Heavy (600031 CH) - 2Q25 Profit +38% YoY with Interim Div; Solid Upcycle

SANY Heavy (SANY)’s net profit in 1H25 grew 46% YoY to RMB5.2bn (2Q25: +38% YoY), which is a strong set of results with major machinery products...

CMB International

SANY Heavy (600031 CH) - Riding on the Up-Cycle of Excavator + Overseas Expansion

We upgrade SANY Heavy to BUY after keeping our HOLD rating for >30 months. We are turning positive as we expect an earnings up-cycle in 2025E26E

CMB International

Lonking (3339 HK): Boom, Boom, Boom

Sany Intl's net profit grew 23.2% in 1Q25, suggesting good momentum for the construction and heavy machinery demand. CCMA data also indicated that...

Osbert Tang, CFA

Lonking (3339 HK): Back to Attractive Zone

We turned bullish on Lonking on 17 Apr, and since then, the stock has performed well. It has just issued a positive profit alert with 91-158% YoY...

Osbert Tang, CFA

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