China Sankei News: Sany Heavy Industry: A-share "rich and handsome" counterattack "poor money"

Source: China Sankei Shimbun Author: Wenju

On August 8, Sany Heavy Industry (600031, SH) distributed 2.278 billion yuan in 2011.

Just like its continuous refreshment of the world record of pump truck booms, Sany Heavy Industry's generous move during China's economic downturn not only made the rumors of its poor money self-defeating, but also refreshed the record of a single dividend in the industry.

It is reported that this cash dividend is the 9th cash dividend of Sany Heavy Industry. In the past 9 years since its listing, Sany Heavy Industry has accumulated cash dividends of 3.734 billion yuan, compared with the two financing amounts of 1.99 billion yuan, and the dividend financing ratio of Sany is as high as 188%.

"Judging from the dividend content of the three giants, Sany Heavy Industry is higher than the other two." A machinery industry researcher who asked not to be named not. According to media reports, Zoomlion has paid a total of 4.85 billion yuan in dividends, but the total amount of funds raised is as high as 18.483 billion yuan, and the difference between cash dividends and financing is negative 13.633 billion yuan. XCMG has accumulated dividends of 1.047 billion yuan, but the total amount of funds raised is 10.424 billion yuan, and the difference between cash dividends and financing is 9.377 billion yuan. The dividend financing ratio of the two construction machinery giants is 26% and 10% respectively.

"Over the years, Sany Heavy Industry has continuously created a number of legends in the capital market, it is the first company to taste the 'head soup' of share reform; it raised 1.99 billion yuan, but the dividend reached 3.734 billion yuan, it created a market value of 100 billion yuan, and entered the top 500 global market capitalization; its average shareholder return rate was 67.4%, ranking fifth in the report of the Boston Consulting Group last year, ranking *5656 among global construction machinery enterprises, and second among Chinese mainland enterprises. In the first half of the year, it fluctuated with the adjustment of the industry, but it suffered from the outside world. But judging from this generous dividend, it is still continuing the capital myth of the strong Hengqiang, which is a company that likes to challenge the limit, and no one knows where its limit is. An unnamed researcher in the machinery industry analyzed.

The "rich and handsome" of the capital market

High gross profit, high cash, high dividend...... Sany Heavy Industry can be described as a typical "rich and handsome" in A-shares, especially in the construction machinery industry, its image of a capital giant with "a glance at the mountains" makes people "envious, jealous and hateful".

Wind data shows that from the end of 1990 to the end of 2010, the cumulative financing of domestic A-shares was 4.3 trillion yuan, and the total cash dividends were only about 1.8 trillion yuan.

"The overall level of cash dividends of listed companies is too low, and the proportion of dividend payouts in the domestic market is only 20% to 30%, while the proportion of dividend payouts in overseas mature markets is generally 40% to 50%." Li Daxiao, director of the Yingda Securities Research Institute, believes.

However, while developing rapidly, Sany Heavy Industry attaches great importance to balancing the relationship between its own operation and shareholder returns, and its return to shareholders is quite generous and generous, and the proportion of dividend financing is even far above the average level of overseas mature markets.

In the first half of 2010, Sany Heavy Industry Co., Ltd. was extremely bold in giving 11 bonus shares to all shareholders for every 10 shares. In 2008, under the background of the financial crisis at that time, Sany Heavy Industry distributed a cash dividend of 0.18 yuan per share to all shareholders, and the dividend to shareholders was unambiguous; in 2009, Sany Heavy Industry distributed a large amount of dividends to all shareholders under the condition of improving economic situation: 2 bonus shares for every 10 shares, a cash dividend of 1.6 yuan, and at the same time, the capital reserve was converted into share capital, and 3 shares were transferred to all shareholders for every 10 shares; in 2011, Sany ranked 28th among all listed companies in the annual dividend ranking of more than 2,600 listed companies in Shanghai and Shenzhen, and among all Chinese private enterprises *5656 bits.

In the past 9 years, the cumulative cash dividends have been 3.734 billion yuan, 5.7 billion bonus shares have been given, and 1.5 billion shares have been converted.

Statistics found that since the establishment of Sany Heavy Industry, it has only raised funds from the capital market twice (including the initial IPO raising 934 million yuan, and the acquisition in 2007).Piling machinerynon-public issuance of shares of 1.056 billion yuan), a total of 1.99 billion yuan, far less than its cash dividend scale of 3.734 billion. In other words, the funds raised by Sany Heavy Industry from the capital market have been returned to shareholders in cash exponentially.

Two years ago, the Boston Consulting Group surveyed more than 700 listed companies in 14 industries around the world and found that from 2005 to 2009, the average return on shareholders of Sany Heavy Industry was 67.4%, ranking first in the world* and ranking *5656 among global construction machinery companies. * New statistics show that from 2005 to 2011, the average annual compound growth rate of Sany Heavy Industry's shareholder return was as high as 88%.

He Dongdong, vice president of Sany Heavy Industry, said in an interview that the rapid development of Sany Heavy Industry has brought huge profits, so Sany Heavy Industry also attaches great importance to returning shareholders.

In fact, the proportion of cash dividends in the capital market to raise funds is an important indicator to measure whether the enterprise is "only circle money without returning", the proportion of Sany Heavy Industry is 188%, and the proportion of other giants in the construction machinery industry is less than 30%.

"Sany Heavy Tools has the characteristics of typical high transfer of shares, and its dividend plan has strong short-term and medium-term investment value after the announcement. In the 9 years since its listing, the stock price of Sany Heavy Industry has shown a steady upward trend in fine-tuning, and the stock price of 5661 has increased by 49 times compared with the IPO issue price, bringing investors a double income of cash dividends and capital gains. The aforementioned researcher said.

Real money fights back against "bad money"

Due to its position as the leader in the industry, Sany Heavy Industry's every move will receive special attention from the outside world, and sometimes it will be over-interpreted.

In the first half of the year, the cash flow of leading construction machinery enterprises is generally not optimistic, and the total accounts receivable of the top 8 listed companies in the first quarter was 58.374 billion yuan, an increase of 41.5% over the end of 2011. The total net cash flow decreased from 9.652 billion yuan in 2010 to a net outflow of 2.814 billion yuan last year, far lower than the net profit of 23.012 billion yuan. This makes the outside world also wonder about the cash flow of the industry leader Sany Heavy Industry; The announcement of Sany Heavy Industry to choose H-share listing also made the outside world suspicious of its capital chain for no reason.

"Just last month, Sany Heavy Industry suddenly canceled the IPO promotion activity in Hong Kong that was scheduled to start on July 16, which shows that it is not bad for money, its listing in Hong Kong is only for internationalization, and it is waiting for a suitable time; This time, it paid a record dividend of 2.3 billion yuan, which is a signal to the outside world that it is not bad for money. The above-mentioned researcher analyzed that therefore, the concern about the capital chain of Sany Heavy Industry is somewhat unfounded.

Not only that, on July 23, Putzmeister, a subsidiary of Sany Heavy Industry, invested 8.1 million euros to acquire 100% of the shares of Intermix GmbH, the third largest concrete mixer truck in Europe and a manufacturer of special mixing equipment.

"Like the first two signals, this is still a signal, a company with poor money cannot go to overseas mergers and acquisitions so frequently, which shows that everything is under the control of Sany Heavy Industry." said the aforementioned researcher.

Wind data also corroborates the researchers' claims. In the past five years from 2006 to 2010, Sany's total return on assets (ROA) was 5661 among listed construction machinery companies, which was 20.73%; The net profit margin of total assets is 17.79%, ranking in the construction machinery listed company *5656, which shows that the company's input-output level is *5661, the asset operation is effective, and the cost control level is better; The return on invested capital (ROIC) is as high as 20.35%, ranking first among listed construction machinery companies.

He Dongdong said in an interview that several actions of Sany Heavy Industry, especially this time to return 2.3 billion yuan to shareholders, show that the previous concerns of the outside world are completely superfluous. "The company's net cash flow from operating activities in the first quarter was an outflow of 4.3 billion yuan, which is a seasonal factor, from the statement disclosed in 2010 and 2011, the first quarter is a period of poor operating cash flow, and in the second quarter will gradually improve, such as the net operating cash flow in the first quarter of 2011 was -3.405 billion yuan, and the second quarter was 3.608 billion yuan. Considering that the scale of operation of enterprises varies greatly, the index of accounts receivable turnover ratio can more accurately reflect the situation of enterprises than the relative value of accounts receivable. ”

It is understood that in the first quarter of 2012, the balance of accounts receivable of Sany was 20.502 billion yuan, and the turnover rate of accounts receivable was 0.89 times, which was much higher than that of Zoomlion (0.33 times), XCMG (0.65 times) and other enterprises in the same industry, and was at the leading level in the industry.

In He Dongdong's view, Sany's situation is not only not as bad as the outside world thinks, but also relatively optimistic. In the first half of the year, Sany continued to be the leader in the concrete machinery market, and the excavator business situation is similar, from January to June this year, the market share of Sany excavators increased from 12% at the end of last year to 18%, further distancing itself from competitors.

Recently, CICC's survey data shows that although the industry as a whole has fallen by nearly 20% since the beginning of this year, leading companies such as Sany Heavy Industry have shown positive growth. In the first quarter, Sany's revenue was 14.678 billion yuan, a year-on-year increase of 4.93%, and it continued to maintain good growth in the second quarter. From January to June, the development momentum of pumping was good, and the supply of long boom pump trucks was in short supply; The share of excavators increased from 12.2% last year to 18% this year, and exports increased by 120%; The share of cranes increased from 14% last year to 21%, and exports increased by more than 60%. From January to June, the export of all products of Sany increased by 130% year-on-year. Internationally, after the completion of Sany's acquisition of Putzmeister, its business grew by more than 10%.