Securities Times: Xiang Wenbo, President of Sany Heavy Industry: Overseas "hunting" will continue

Source: Securities Times

"China's construction machinery industry is basically bottoming out, may decline in the second half of the year, optimistic that the market will pick up early next year." On August 3, Xiang Wenbo, president of Sany Heavy Industry (600031), judged the trend of the industry in an exclusive interview with a reporter from the Securities Times.
According to the Securities Times, Xiang Wenbo also clarified rumors about the company's layoffs and financial constraints, saying that the company currently has abundant cash flow and has no plans to lay off employees.
At the same time, Xiang Wenbo said that due to the impact of the international economic situation, Sany Heavy Industry's H-share IPO has been suspended, but the company's overseas expansion is accelerating, "The European debt crisis has given the company a good 'hunting' opportunity, and we are negotiating new overseas acquisition projects." ”

The industry is expected to pick up early next year

Xiang Wenbo said that China's construction machinery industry expects the third quarter to pick up "too optimistic". Although the domestic macro economy bottomed out, the vicious competition in the entire industry in the second half of last year led to market overdraft, which took time to digest," reflected in the statement, the performance of the whole industry in the third and fourth quarters will still show a downward trend. ”
However, Xiang Wenbo believes that signs of industry recovery have appeared: GDP in the second quarter increased by 7.6% year-on-year, "breaking 8" for the first time in 12 quarters, and the follow-up policy tone should be "8"; In addition, the CPI rose by 2.2% year-on-year in June, leaving room for the subsequent introduction of "stable growth" economic stimulus policies. With the resumption of a number of major infrastructure projects such as railways and water conservancy, the demand for major products will gradually improve in the second half of the year. "It is expected that the market will pick up from the end of the year to the beginning of next year." Xiang Wenbo judged.
At the same time, Xiang Wenbo believes that it is unlikely that the country will introduce a large-scale stimulus policy similar to the "four trillion", and the high-growth industry environment has changed. However, "Sany Heavy Industry is not afraid of such challenges, and good enterprises are born in the crisis." ”
Xiang Wenbo predicts that in the long run, the construction machinery industry is still a "sun never sets" industry. The process of urbanization and the renewal and development of infrastructure projects have made China's construction machinery industry have at least 20 years of development; The development of global engineering mechanization has led to an increase in the international market demand, "so it is impossible to predict when the international market will peak, like Caterpillar has been growing steadily for more than 100 years." ”
 

　　The company has been cash flow-strong

Previously, there was speculation that Sany would lay off employees due to tight cash flow and suspend the H-share IPO.
Xiang Wenbo said that Sany Heavy Industry has never been worried about money, not bad money, "the company's H-share listing is not a lack of money, but for an international platform." ”
Xiang Wenbo introduced that since the second half of last year, the country began macroeconomic control, resulting in a sharp decline in the entire construction machinery industry, and the profits of some construction machinery listed companies fell by 80% year-on-year. In this case, in the first quarter of this year, Sany Heavy Industry still achieved a profit of 5%.
On August 2, Sany Heavy Industry announced that the company's 2011 cash dividend was 3 yuan per 10 shares, with a total of 2.278 billion yuan. This is the ninth cash dividend of Sany Heavy Industry in the nine years since its listing in 2003. The company's cash dividends in 2011 exceeded the sum of the past 8 years, which means that "not bad money" is full.
Regarding the layoff turmoil, Xiang Wenbo responded that this is actually a misreading of the company's established "make-up" strategy.
In the past few years, due to the rapid development of the industry, the company recruited a large number of new employees, and there was no time to effectively train personnel under the condition of rapid growth of the industry at that time. This year, large-scale training began to be carried out, including workshop operation, assembly, disassembly, etc. Xiang Wenbo said that due to poor communication, some employees thought that this was a punitive arrangement by the company.
Xiang Wenbo said that although the environment for the rapid development of the entire industry is no longer there, the company is still developing, the market volume is still expanding, logically speaking, even if the company does not recruit, it will not lay off employees. He stressed that the company has never cut salaries in its history.
As for the H-share IPO, Xiang Wenbo said that there is no timetable, but under the current economic situation, the IPO will be suspended, "7 or 8 times the price-earnings ratio, the issuance is of little significance, and the postponement of the issuance may be able to obtain a higher price, not to mention that the company is not short of money now." ”
　　

Actively "hunting" overseas
　　

At present, the European debt crisis is unresolved, and the Hong Kong H-share market is not stable, Xiang Wenbo said that it is not a good time to start Sany Heavy Industry's H-shares, but a good time to acquire.
After the acquisition of the German "Elephant" global concrete machinery giant Putzmeister, Xiang Wenbo said that the global economic downturn will bring good acquisition opportunities, with the decline of the Chinese market, the company is gradually taking internationalization as the focus of work, through internationalization to reduce dependence on the Chinese market.
Xiang Wenbo told reporters that the acquisition of "Elephant" will change the competitive pattern in the world concrete field and achieve Sany's internationalization goal 5~10 years ahead of schedule.
The acquisition of "Elephant" did bring "sweetness" to Sany. According to the data, in the first half of this year, affected by the acquisition of Putzmeister, Sany Heavy Industry's overseas business share increased significantly, with an increase of more than 60% in the first half of this year, with an increase of more than 60% in the first half of this year, much higher than the average export growth rate of 32.9% in the domestic construction machinery industry in the first half of this year. Among them, Sany excavator exports increased by nearly 102% year-on-year;Truck cranesExports increased by nearly 60% year-on-year; The export of crawler cranes increased by more than 180% year-on-year.
Putzmeister also performed well, with profits up 500% year-on-year in the first half of the year and 33% year-on-year sales in June.
Xiang Wenbo said that after the blow of the financial crisis, many machinery manufacturers in Europe began to fall into a crisis, and their revenue and profitability fell sharply, which brought more opportunities for Sany to acquire and integrate overseas enterprises. "The opportunity for Sany Heavy Industry to hunt has come."
After the acquisition of "Elephant", Putzmeister, a subsidiary of Sany Heavy Industry, invested another 8.1 million euros to acquire 100% of the shares of Intermix GmbH, the third largest manufacturer of concrete mixer trucks and special mixing equipment in Europe. However, this is only the beginning of the accelerated expansion of Sany Heavy Industry's overseas industrial chain, revealing to Wenbo that the company is negotiating new overseas acquisition projects and large-scale cooperation plans.