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’s net profit in 2Q23 surged 81% YoY to RMB1.9bn but largely helped by a low base effect as well as an increase in FX gain of RMB487mn.</li><li>While export growth of 36% is impressive and took the overseas revenue ratio to 58% in 1H23, we are concerned about a peak of export, given the weak industry excavator export volume in Jun/Jul (-1%/-14% YoY, according to CCMA).</li><li>We revise down our 2023E/24E earnings forecast by 9%/3% after resetting our volume and expense 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.

SANY’s net profit in 2Q23 surged 81% YoY to RMB1.9bn but largely helped by a low base effect as well as an increase in FX gain of RMB487mn.While export growth of 36% is impressive and took the overseas revenue ratio to 58% in 1H23, we are concerned about a peak of export, given the weak industry excavator export volume in Jun/Jul (-1%/-14% YoY, according to CCMA).We revise down our 2023E/24E earnings forecast by 9%/3% after resetting our volume and expense 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 Industry (600031 CH) – 2Q23 Net Profit +81% but Largely Due to Low Base & FX Gain

Thematic (Sector/Industry)

<ul><li>According to the preliminary data from CME, China’s excavator sales dropped 26% YoY to ~13.2k units.</li><li>Sales in China remained weak with an estimated 49% YoY decline to 4.7k units in Jul, which is not a surprise given the lack of powerful stimulus policies.</li><li>Export, which had been strong since 2020, however, starts to see a loss of momentum. Export volume is expected to drop 2% YoY to 8.5k units in Jul, according to CME. </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.

According to the preliminary data from CME, China’s excavator sales dropped 26% YoY to ~13.2k units.Sales in China remained weak with an estimated 49% YoY decline to 4.7k units in Jul, which is not a surprise given the lack of powerful stimulus policies.Export, which had been strong since 2020, however, starts to see a loss of momentum. Export volume is expected to drop 2% YoY to 8.5k units in Jul, according to CME. 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.

China Construction Machinery – Export of Excavator Running Out of Steam

<ul><li>SANY’s 3Q22 net profit declined 61% YoY to RMB963mn, with earnings largely contributed by finance income and other gains.</li><li>The lack of gross margin recovery along with the increased distribution expense and R&amp;D spending are the key factors that dragged the earnings.</li><li>We slash our 2022E/23E/24E earnings forecast by 52%/38%/36% (37%-44% below consensus), largely a result of lower sales volume and higher expense 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.

SANY’s 3Q22 net profit declined 61% YoY to RMB963mn, with earnings largely contributed by finance income and other gains.The lack of gross margin recovery along with the increased distribution expense and R&amp;D spending are the key factors that dragged the earnings.We slash our 2022E/23E/24E earnings forecast by 52%/38%/36% (37%-44% below consensus), largely a result of lower sales volume and higher expense 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 Industry – A (600031 CH) – Another Weak Quarter; Still Challenging

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)