Sany Heavy Industry Co., Ltd. (600031): Acquiring Group Financial Assets to Give Full Play to Synergy

Sany Heavy Industry Co., Ltd. (600031): Acquiring Group Financial Assets to Give Full Play to Synergy

The company issued an announcement: It intends to use its own funds to acquire Sany Automobile Finance Co., Ltd. 91 held by the controlling shareholder Sany Group.

43% equity, the corresponding asset valuation is RMB 42.

21 trillion, the proposed transaction amount is RMB 39.

8 billion.

SANY Auto Finance is one of the 25 auto finance companies in the country. It mainly provides financial services to the construction machinery industry and is the first auto finance company in China’s construction machinery industry.

According to the company announcement, since 2016, Sany Auto Finance’s operating income has stabilized at 2.

2-2.

500 million US dollars, and basically from the top to the net net income; but the change in net profit penetrates, which is essentially a breakthrough in asset impairment losses; the net profit rate has always remained above 30%.

In 2019, Sany Automobile’s financial asset impairment losses are equivalent, due to net profit expectations, to 2017 and 2018.

As of October 2019, the total assets of Sany Auto Finance were approximately 97.

500,000 yuan, asset-liability ratio of 70.

16%.

According to the company’s announcement, the incremental debt balances of Sany Heavy Industry in 2017, 2018苏州夜网论坛 and 2019H1 with repurchase obligations were 13 respectively.

1.4 billion, 19.

1.4 billion and 32.

24 ppm, reflecting Sany’s continuous increase in sales through Sany Auto Finance.

  SANY Auto Finance will issue loans and advance funds from 56 in 2019.

2 billion to 91.

39 trillion, an increase of 62.

63%, we judge the first is that under the high prosperity of the construction machinery industry, the business of Sany Group has developed rapidly.

  The Group promises that if the net receivables of Sany Auto Finance suffer losses due to the risk of repayment, the Group will make up for a part of the losses and reduce the financial risks of listed companies acquiring Sany Auto Finance.

The quality of construction machinery products is relatively high, and customers often purchase through financing.

According 深圳SPA会所 to the company’s announcement, the interest expenses paid by Sany Heavy Industry to Sany Auto Finance in 2017, 2018 and 2019H1 were 550 respectively.

40,000 yuan, 16.

70,000 yuan and 90,000 yuan.

Due to the problem of related party transactions between listed companies and the group, compared with the scale of Sany Heavy Industry’s income or Sany’s auto finance interest income, the scale of the transactions is very low.

An IPO will effectively reduce the scale of connected transactions, while SANY Elderly can provide distributors and customers with a package of products, services, and financing, and form complementary advantages, reduce financing costs, enhance product and service competitiveness, and improveProfitability, driving the company to transform to “manufacturing + services”.

SANY Auto Finance started from the domestic market and gradually expanded its business to the United States, Germany, Singapore, India, Brazil, South Africa, Saudi Arabia and other places, and further developed in depth. It established a unified global management and coordinated support for corporate financial development.Plate space layout.

The company’s acquisition of Sany Automotive Finance will promote the company’s internationalization process, help establish and improve financing channels for the overseas sales of individual products, promote the financial support needed for overseas construction machinery sales, and effectively reduce the company’s and customers’ overseas financing costs.

We maintain our profit forecast and expect the company’s net profit for 2019-2021 to be 112.

30/126.

22/143.

19 trillion, excluding further conversion of convertible bonds, the corresponding EPS for 2019-2021 is 1.

33/1.

50/1.

70 yuan / share, the corresponding PE is 12.

1/10.

7/9.5x (2019/12/11), maintaining the rating of “Prudent Overweight”.

Risk warning: The sales volume of construction machinery is lower than expected, and the export business is lower than expected.