首页 - 股票 - 研报 - 行业研究 - 正文

China Machinery Construction:Sany factory visit reinforces our bullish view on excavators;CL Buy

关注证券之星官方微博:

Visit to Sany Heavy excavator plant reinforces our bullish viewWe visited Sany Heavy’s excavator plant in Kunshan last week. Based onour communication with the company, demand post Chinese New Year isstronger than the company had expected.

1. Volume: The company expects over 100% yoy growth in excavatorshipments in 1Q17 (vs. +72% in Jan), based on the current order bookfrom dealers. This implies strong delivery in Feb/Mar, with salesvolume growing 285%/60% yoy (Feb. yoy growth is particularly strongdue to more working days in Feb. 2017). This eliminates investorconcerns on post Chinese New Year demand as March is the keydemand bellwether for excavators (on average, March has accountedfor 20% of the annual sales volume over the past 5 years).

2. Inventory: Sany’s current inventory is very low at roughly onemonth’s sales, while the industry norm is to have two months’inventory to ensure timely delivery. Sany’s new machine inventory isc. 2,200 units (including inventory at dealers), while its used machineinventory is c. 1,000 units (vs. 2,000 units a year ago).

3. ASP: Sany has not raised its ex-factory price yet as it intends to1) expand its market share, and 2) share the profit with its dealersinstead of squeezing them.

4. Production: The factory now operates at max utilization (based oncurrent employee level) and Sany is hiring more workers. The bottleneckpreventing Sany from ramping up its capacity quickly is not people,but rather the limited supply of imported parts (foreign suppliers arenot very flexible in accommodating order changes).

Channel checks with supplier/dealer support strong growthWe also cross-checked with major hydraulic parts supplier Hengli Hydraulics(601100.SS, Not Covered; 50% of excavator cylinder market share in China).

Data appears consistent – its Jan. excavator cylinder order doubled (a leadingindicator for excavator production) and its current production plan is fullybooked until May. Also, Shanghai’s largest used machine dealer currently hastight inventory – at the current run rate, their inventory would sell out in onemonth assuming no restocking. Overall, we remain positive on excavatorsales and stay CL-Buy on Sany Heavy, with a 12m TP of Rmb9.1 (still basedon 2018E EV/GCI vs. CROCI/WACC, sector cash return multiple of 1.07X). Keyrisks include: lower-than-expected infrastructure/ property FAI growth;slower-than-expected market share gain; weaker-than-expected cost control.





微信
扫描二维码
关注
证券之星微信
APP下载
下载证券之星
郑重声明:以上内容与证券之星立场无关。证券之星发布此内容的目的在于传播更多信息,证券之星对其观点、判断保持中立,不保证该内容(包括但不限于文字、数据及图表)全部或者部分内容的准确性、真实性、完整性、有效性、及时性、原创性等。相关内容不对各位读者构成任何投资建议,据此操作,风险自担。股市有风险,投资需谨慎。如对该内容存在异议,或发现违法及不良信息,请发送邮件至jubao@stockstar.com,我们将安排核实处理。
网站导航 | 公司简介 | 法律声明 | 诚聘英才 | 征稿启事 | 联系我们 | 广告服务 | 举报专区
欢迎访问证券之星!请点此与我们联系 版权所有: Copyright © 1996-