Sany 无锡桑拿网 Heavy Industry Co., Ltd. (600031): Cut down acquisition consideration, show sincerity, raise 2020 profit forecast to 13.5 billion

Introduction to this report: The announcement will be Sany Auto Finance 91.

43% consideration is reduced to 33.

800 million, showing the sincerity of major shareholders; based on the continued rise in demand for construction machinery, raise the 2020 profit forecast to 13.5 billion, and raise the target price to 19.

32 yuan.

Key points of investment: Conclusion: The company will be Navy Trinity Auto Finance 91.

The consideration for 43% equity interest is reduced to 33.

800 million, down 600 million, a decrease of 15.

1%, we think the consideration shows sincerity; M & A assists the company’s overseas market expansion, and promotes “manufacturing + service” and digital strategy.

Maintain 2019 EPS as 1.

33 yuan, based on the continued growth in demand for construction machinery, raised EPS to 2020-21.

61 (+0.

18) / 1.

67 (+0.

23) Yuan, give 12 times PE in 2020, raise target price to 19.

32 yuan.

The purchase consideration is reduced by 600 million, a decrease of 15.

1%, showing sincerity.

On December 11, the company announced that it intends to acquire the Group’s holding of Sany Auto Finance 91.

43% equity, consideration 39.

800 million; 22 announced that the board of directors agreed to adjust the consideration to 33.

800 million, a decrease of 600 million, a decrease of 15.

1%; corresponds to 1.

26 times PB (October 30, 2019), corresponding to 20th of 2018.

77 times PE.

The Group specifically promises that if the budget receivable causes losses due to the repayment, the Group will make up for it and the reduction of the consideration will show the sincerity of the major shareholders.

Assist overseas market expansion, promote “manufacturing + service”, digital strategy.

From a business perspective, Sany Auto Finance is mainly engaged in the mortgage loan business. This acquisition enables the company to provide services, financial integration solutions, and strengthen customer stickiness; it can also serve as an overseas credit sales support platform to promote internationalization;Assist in the integration of manufacturing and financial risk control models and advance digital strategies.

Demand for construction machinery continued to rise, raising its 2020 profit forecast to 13.5 billion.

Excavators and crane sales increased by 21 in November.

7%, 33.

5%, and Komatsu excavator startup hours resumed positive growth in November, crane operating rate continued to rise, driven by the start of new projects, demand is expected to remain strong in 20Q1, raised 2020 profit forecast to 13.5 billion (+1.5 billion).

The company’s excavator sales increased by 30% in November, with a cumulative share of 25 from January to November.

6%, an increase of 2.
.

7pct, steadily improved.

Risk reminder: Real estate investment has grown significantly, and the competitive landscape has deteriorated.