Tightening investment for the winter Interview with He Zhenlin, vice president of Sany Group

The policy of 4 trillion yuan to stimulate domestic demand has set off a wave of waves in the stock market that has been dormant for a long time. The stock price of Sany Heavy Industry (600031 market, love stocks, main trend) has been reflected, rising by 52.79% from November 4 to November 14. Can Sany Group survive the winter? Following the "face-to-face" with He Zhenlin, vice president of Sany Group in September (see Issue 39 of "The Current Stock Price of the A-share Market Has Deviated from Value"), this week the reporter met He Zhenlin at the Diaoyutai Hotel in Beijing.

Open source and reduce expenditure, prudent investment

Red Weekly: Can you talk about the impact of the global financial crisis on Sany Group?

He Zhenlin: We are already feeling the chill brought about by the financial crisis. Especially at the end of this year, it is obvious that some machinery sales are beginning to shrink. The measure we should take is to increase revenue and reduce expenditure, and invest prudently. Tighten the scope and amount of investment, slow down the speed and frequency of investment, and rearrange the layout by adjusting the investment cycle and investment amount.

Red Weekly: What is Sany Group's profitability this year?

He Zhenlin: The group's sales revenue in 2007 was 13.5 billion yuan, and this year's pessimistic forecast is 22 billion yuan. In 2007, the main business profit was 1.8 billion yuan, and the total profit was 4.32 billion yuan, and the main business profit is expected to reach 2.7 billion yuan in 2008.

Limited investment diversification

"Red Weekly": The introduction of the 4 trillion yuan economic plan to stimulate domestic demand must have a great impact on the company's future development.

He Zhenlin: Not only 4 trillion? According to the vice governor of Hunan Province in charge of finance and economy, the state will introduce 15 trillion yuan of investment in infrastructure and housing projects in recent years, which is a very strong investment. When China is facing economic difficulties, it often plays the card of increasing public financial investment, and Sany will undoubtedly benefit from it. Because the construction machinery industry to which the company belongs can not only meet the needs of public utilities investment, but also meet the needs of consumption growth. In particular, it is conducive to alleviating the cement,Concrete machineryand other adverse effects of reduced demand. It is believed that with the successive introduction of economic stimulus plans, the chill caused by the impact of the global economic crisis will soon pass, and next year's development goals can still maintain high expectations.

Red Weekly: But maybe it's not so rosy. We note that this week, Li Rongrong, director of the State-owned Assets Supervision and Administration Commission, issued a "winter mobilization order". State-owned enterprises are not having a good time, how will private enterprises survive this winter?

He Zhenlin: Different enterprises will behave differently in the crisis due to the different platforms they have built. Our company has maintained a relatively healthy cash flow; It has a high reputation in the bank, and many loan lines are basically useless. In the current tight situation, the group still has billions of yuan of monetary funds on hand.

Red Weekly: It seems that this also echoes the view expressed by Li Rongrong, director of the SASAC, that "cash is king". After Sany Group withdrew from the A-share market in August this year, what areas has it invested in?

He Zhenlin: Mainly focus on investment in related industries, such as "digging" Sany Heavy Machinery has injected assets into listed companies, and in the future, other construction machinery assets promised by the group will be injected into listed companies one after another, and the overall focus is on the core technology of hydraulics. The company is now adopting a "limited diversification of investments", tightening expenses and making investments more cautious!

"Red Weekly": Sany Heavy Industry has said that it will withdraw from the secondary market before the end of August, but the third quarterly report shows that the company still holds two stocks, S Yan ST North Asia and Lili Electronics, with a market value of 6.71 million yuan. What's going on?

He Zhenlin: S Yan ST North Asia has not resumed trading since April 27, 2007. Lili Electronics is a subscription of new shares, that is, 2,500 shares, originally on July 8, 2008 on the small and medium-sized board listed, but on July 7, due to the outside world suspected that the main assets of the stock have the problem of secondary listing, the China Securities Regulatory Commission has urgently stopped so far. So like the majority of investors, there is nothing else to do but wait.

Red Weekly: How to respond to future changes in the business environment?

He Zhenlin: The only way to do this is to turn the crisis into an opportunity and deal with it calmly. The construction machinery industry is facing huge business opportunities for China's urbanization and industrialization. *5656, China's urbanization is only 45% complete, while the urbanization of developed countries is more than 80%. Second, the state will introduce 15 trillion yuan of investment in infrastructure and housing projects. Thirdly, and importantly, the global economic downturn also provides an opportunity for consolidation. For example, Sany Heavy Industry announced in 2007 that it would invest 60 million US dollars to set up a factory in the United States, which is currently in the stage of building a factory. In particular, the downturn in the U.S. economy also provides an opportunity for us to recruit elites. Therefore, we must not only see the crisis, but also see the opportunity, practice our internal skills, and turn the crisis into safety.

Refuse to be a "triple blind" investor

What advice do you have for small and medium-sized investors after the :* of Red Weekly?

He Zhenlin: I think: 1, at present, China's stock market has reached the investment area, but opening a position is not an overnight thing, this is a range. 2. Be selective. The first is the profitability of the stock; secondly, future growth; Moreover, it must be in line with the direction of national industrial development. You can't catch watermelon and sesame together, you must choose high-quality, high-growth enterprises. For example, railway projects and highway projects in public utility investment echo the current economic policies introduced by the state. 3. Do not blindly follow (blindly follow some stock reviews), blind action (impulsive and random investment), blind investment (do not choose a good stock, do not choose a good time), do stocks is to choose stocks and time.

Source: Securities Market Red Weekly