Securities Daily: Sany Heavy Industry's overseas mergers and acquisitions ended successfully, and the technology market blossomed on both sides

Source: Securities Daily Reporter: Yu Nan

In the macro context of "steady growth", benefiting from the "leading" position of the construction machinery industry, the share price of Sany Heavy Industry experienced a round of downturn of 5% from May 2 to 18, and then launched a counteroffensive. The fierceness of this "counteroffensive" momentum is staggering, so much so that Sany Heavy Industry has created a cumulative increase of 6.8% in just 4 days.

In fact, this China*5655, the world's sixth largest construction machinery manufacturer, has been watching a lot after entering 2012. It not only made a good start for 2012 with the beautiful "2011 Annual Report", but also used a huge amount of money to acquire the German concrete industry leader - Putzmeister's feat, which attracted countless applause.

Now, the infrastructure investment promoted by the management in order to achieve "stable growth" will bring a rare development opportunity for Sany Heavy Industry.

　The feat of "snake swallowing elephant".

On January 30, 2012, together with the good news that Sany Heavy Industry "expects to achieve a significant increase in net profit attributable to the owners of the parent company in 2011 compared with the same period last year", the "Announcement on the Resolution of the 16th Meeting of the Fourth Board of Directors of Sany Heavy Industry" showed that the board of directors of the company deliberated and passed the "Proposal on the Acquisition of German Putzmeister Company".

At this point, the rumored internationalization feat of Sany Heavy Industry has finally "come to light". According to the details of the acquisition announced by Sany, Sany Germany GmbH, a subsidiary of the company, will cooperate with CITIC Fund to acquire 100% of the shares of the German construction machinery giant Putzmeister, of which Sany Germany will acquire 90% and CITIC Fund will acquire 10%. Sany Germany invested 324 million euros (equivalent to 2.654 billion yuan).

Once upon a time, this feat like a "snake swallowing an elephant" attracted countless flowers and applause, but it was also questioned.

The transaction has now been officially closed. In the face of doubts, He Zhenlin, vice president of Sany Heavy Industry, publicly said, "Putzmeister has a history of more than 50 years and more than 3,000 employees, and the integration of corporate culture after mergers and acquisitions is often the key factor in the success of the marriage." At present, Sany entrusts the current CEO of Putzmeister as the head of the full authority, and the board of directors only sends a senior assistant to the chairman as a special liaison, and promotes this CEO to the senior vice president of Sany Heavy Industry and enters the board of directors. At the same time, the preservation of the original Putzmeister brand is also an important step in our internationalization."

There is no doubt that for this international merger and acquisition, Sany is fully prepared and full of confidence. Xiang Wenbo, president of Sany Heavy Industry, once recalled that at that time, "the board of directors of Sany Heavy Industry believed that even if it was 20 billion, we would take Putzmeister". "20 billion yuan is the profit of Sany Concrete for two years, but the acquisition of Putzmeister has shortened the internationalization process of Sany by 5-10 years. And one less competitor. You know, a few months ago we were fighting for business in India. Xiang Wenbo added.

In addition, Liang Wengen, chairman of the board of directors of Sany Group, also confidently said, "Sany and Putzmeister have a strong complementarity in the geographical layout of global business activities, and there is no doubt that a new one will be created after the completion of this merger."Concrete pump truckGlobal manufacturing giants".

　Net profit in the first quarter increased by 5.3% year-on-year

Compared with the "operating profit of 9.847 billion yuan in 2011, a year-on-year increase of 42.78%", Sany Heavy Industry's first quarter report in 2012 is unpretentious. According to the data, in the first quarter of 2012, Sany Heavy Industry achieved sales revenue of 14.68 billion yuan, a year-on-year increase of 4.9%; net profit attributable to shareholders of listed companies was 2.804 billion yuan, a year-on-year increase of 5.3%.

But despite this, according to the statistics of the China Construction Machinery Association, Sany's excavators sold 7,190 units in the first quarter, winning the championship with 3,000 units more than the second place, and the market share quickly increased to 16%. At present, the industry position of Sany small and medium-sized digging products is stable and unshakable, and the market share of the big digging in 2011 was 6%, reaching 14% in March this year, and the monthly sales volume of the Ding army broke the long-term monopoly pattern of foreign brands. The whole excavator industry continues to show a pattern of "import substitution" and "increased concentration", and domestic manufacturers led by Sany are rapidly occupying the market of foreign brands.

As far as the whole year of 2012 is concerned, although the progress of railway and water conservancy investment in the first quarter was slow, only one-tenth of the annual plan was completed. However, with the direction of China's economy clear "steady growth", railways, airports, water conservancy and other infrastructure efforts have become inevitable, in addition, most of the affordable housing will start in May, the demand for construction machinery will gradually pick up, and Sany, as a competitive leading enterprise, will first benefit from the recovery of the industry.

In terms of the international market, after the successful integration of Sany and Putzmanst of Germany, it will significantly improve the technical level of Sany Heavy Industry and enrich the company's product portfolio, and the global sales network established by Putzmanst for more than 50 years will accelerate the internationalization process of Sany.