Daily Economic News: Construction Machinery Semi-annual Examination: Sany Heavy Industry Leads "Quality Growth"

Source: Daily Economic News Reporter: Hu Feijun

In the first half of this year, China's GDP in the first and second quarters was 7.7% and 7.5% respectively, and the economy showed a downward trend. According to the China Construction Machinery Market Index (CMI) released, it reached 134 points in March this year at *5661 points, and began to decline gradually in April. The CMI was 88 in May and 84 in June, continuing to decline. It shows that the traditional cycle peak season of the construction machinery industry from April to June is not prosperous, but the performance is worse than that from January to March.

In this context, Sany Heavy Industry takes advantage of the trend and adheres to the rational, pragmatic and steady business strategy of "controlling risks, seizing opportunities, reducing costs, and selecting talents".

Under the strategy of "risk control" as the focus of business, Sany Heavy Industry still achieved good performance in the first half of the year. Not only with an operating income of more than 22 billion yuan to dominate the domestic construction machinery industry, from the structural point of view, concrete machinery and other sectors are as always, with relative advantages to sit in the top spot in the global market.

The reporter found that from the upstream R&D and innovation to the pragmatic promotion of production and sales in the midstream, and then to the satisfaction of downstream users, in the context of the macroeconomic slowdown, Sany Heavy Industry's rational, pragmatic and stable business strategy has gradually shown results.

Hold on to a number of industries

Judging from the operating performance in the first six months, Sany Heavy Industry not only held a number of industries, but also opened up new profit growth points.

The operating income of 22.085 billion yuan makes it firmly in the top spot in the domestic construction machinery industry. Among them, the fist product concrete machinery recorded a revenue of 11.087 billion yuan, as always, ranking in the global concrete machinery industry, and excavators achieved a revenue of 5.284 billion yuan, ranking first in the domestic market.

It is understood that in the past six months, on the basis of continuing to maintain the global leading position of concrete machinery, Sany Heavy Industry has diversified its main business income, and excavators and cranes are accelerating to become the company's new profit growth point: the proportion of excavators has increased by about 3 percentage points, accounting for 24.51%, and it has been the leading seller for 27 consecutive months, with a market share of 15%; The proportion of cranes increased by about 2.6 percentage points, accounting for 12.82%, and the market share of medium and large tonnage reached 35%.

Compared with several industry leaders, Sany Heavy Industry's return on net assets and return on total assets in the first half of 2013 were higher than those of competitors. Excluding the impact of financial leasing, the gross profit margin of Sany's main business in the first half of the year was 31.9%, which was also higher than that of competitors.

In fact, in addition to the performance link itself, Sany Heavy Industry has achieved the best results in the industry in terms of upstream R&D innovation and downstream after-sales evaluation.

Up to now, the company has applied for 4,886 patents and authorized 3,115 patents, far more than its competitors. Since the beginning of this year, the A8 series wet mix mortar equipment, C8 series pump trucks, V8 urban * Feng series complete sets of equipment, C9 excavators, etc. have become the new force in the first half of the year in *5656 time.

In May ~ June this year, the China Association for Quality conducted a detailed survey on more than 1,000 customers, and conducted user satisfaction evaluation on eight leading products such as concrete machinery, road machinery, and lifting machinery.

Internationalization has entered the acceleration

As one of the highlights of the *5655 report, in the international market, Sany Heavy Industry has gained even more of the best. In the first half of the year, its international sales revenue was 5.439 billion yuan, an increase of 66.5% over the same period last year, accounting for 24.6% of the total.

Among them, Sany United States achieved an increase of 55.8%; Sany Asia-Pacific grew by 90.1%;Truck cranesInternational sales increased by 44.3%. In the first half of the year, its international operating income increased by 66.5% over the same period last year, 64.23 percentage points higher than that of another industry leader, and its sales were 4.134 billion yuan more.

Sany Heavy Industry said that the localization of excavators, cranes and other products in strategic markets such as India and Brazil has made great progress. The international sales of truck cranes increased by 44.3% over the same period last year, especially in strategic emerging markets such as Brazil and the Middle East, winning high praise from the market; The excavator has not only maintained a solid position in emerging markets such as Africa and the Asia-Pacific region, but also made significant breakthroughs in the American market, and its performance and quality have reached the international first-class and gradually been recognized by the high-end market.

It is worth noting that Putzmeister, a subsidiary of Sany Heavy Industry, also performed very well - with a total revenue of about 2.66 billion yuan, accounting for 12.03% of the total revenue.

The research report released by Galaxy Securities mentions, "We believe that the construction machinery industry will remain sluggish in 2013, and put forward higher requirements for the growth quality of companies in the industry." Sany proposes to "control risks, grasp the market, reduce costs, and select talents" as the current and future business priorities, strengthen payment collection, reduce costs, control risks, and at the same time, the company vigorously develops overseas business, and internationalization will become a bright spot in the future. ”

The risk control has achieved remarkable results

As early as 2012, the board of directors of Sany Heavy Industry made clear the principle of "one to three don'ts" of "to pursue profitability and profitability, not to blindly pursue scale, not to blindly pursue seats, not to blindly pursue market share". This change in business thinking is Sany's thinking on how to deal with the relationship between development scale, efficiency and brand, and it is also its in-depth thinking on business risks in the current economic environment. Liang Wengen, chairman of Sany Heavy Industry, said that only by strictly implementing and implementing these ideas can Sany maintain a more stable development.

Under the steady business idea, Sany Heavy Industry, which puts "risk control" in the most important position, is achieving greater and greater results in risk control.

First of all, control the risk from the source and prevent new risks from arising. The company adjusted its business strategy, strictly controlled the transaction conditions, and the proportion of full payment in the sales model continued to rise, the proportion of credit sales (bank mortgage and financial leasing) continued to decline, and the balance of guarantee showed a downward trend compared with the end of last year. The collection rate in the second quarter increased significantly by more than 92% compared with the first quarter.

In addition, the company's actual bad debt rate dropped from 4‰ last year to 0.2‰ - in January ~ June this year, Sany wrote off 3.908 million yuan of bad debts, and the actual bad debt loss rate was only 0.02%.

According to the interim report, the net cash flow generated by Sany Heavy Industry's operating activities increased by 20% over the same period last year, and the three expenses decreased significantly compared with the same period last year, of which sales expenses decreased by 26.3%, management expenses decreased by 17.3%, and financial expenses decreased by 65.4%.

According to the new research report released by Huaan Securities, Sany Heavy Industry's cost control has been effective, and the expense ratio has been reduced during the period. The main reason is that the company has strengthened cost control, strengthened cost control in various business divisions, strictly implemented the budget forcing mechanism from R&D cost reduction, manufacturing, sales, logistics and other aspects, and opened sources and reduced expenditure in all aspects (such as the green vegetable base of Kunshan Division, realizing the self-sufficiency of the company's canteen, realizing cost control, etc.), so that the expense rate during the period has been greatly reduced, and the cost control has achieved results, and once the cost control method is implemented by the company, it will continue to promote the implementation of cost control for a long time and continuously. The reduction of the expense ratio during the period is somewhat sustainable.