After nearly nine years of a big cycle, sany's management mentality, corporate competitiveness, asset quality, business strategy has been very different. In the future, the strong constant strong, bibcock concentration will be more deductive. Affected by the outbreak of pneumonia, work has been suspended all over the country. We remain cautious about new construction in the spring of 2020, and pay close attention to the progress of the epidemic. Once the outbreak is controlled, we are expected to have a loose hedging policy after resumption of construction.

At the current time point, we are not pessimistic about the construction machinery demand for the whole year of 2020, mainly because

1) on the macro level, we are faced with the historical task of doubling the economy in 2020. On the medium level, smes are under great debt and capital pressure, and the adverse policy is expected to accelerate due to the impact of pneumonia. 2) the renewal demand will continue. According to our calculation, the annual renewal volume of the excavator industry will still exceed 100,000 units in 2020; 3) property investment protection toughness, strong construction mode to drive the demand for mixer and concrete machinery; 4) by the end of 2020, it is expected to usher in the upgrading of national standards of non-road machinery to stimulate sales; 5) overseas market channel construction gradually enters the harvest period, leading the global market; 6) the collapse of the wuxi viaduct led to a new round of super treatment, which stimulated the sales of stirring trucks in the short term, and the long-term view of lightweight will become an important development trend.

& have spent Ownership model based on our calculation, according to the demand growth in 2020, concrete machinery > > excavator, crane trinity each product in 2020 is projected to share continue to improve (high tonnage product promotion space more big), to strengthen the cost advantage, and overseas sales remain more than 30% growth, superposition of foreign ownership increases, is expected to drive the valuation & other; Restore & throughout; (caterpillar 2020 PE is 13x) :

Excavator: the sales growth is expected to be 5%-15% in 2020, and the peak period is expected to move back due to the impact of the epidemic. Therefore, the overseas market has great potential. In 2019, sany excavator market accounts for about 26%. Structurally, zhongdiao accounts for 23%, while zhongdiao accounts for 25.5% and xiaodi accounts for 27%.

Crane: expected sales growth of 5-15% in 2020; Installed wind power drives the demand for large-tonnage crawler cranes, while prefabricated buildings drive the demand for large-tonnage tower cranes. In 2019, sany truck crane accounts for 26.3%-27% of the market, and it is expected to continue to increase to more than 28% in 2020. Meanwhile, the tower crane base with an annual output of 8,000 units has just been put into production in November 2019, contributing a new increment next year.

Concrete machinery: it is conservatively estimated that the sales volume of pump trucks is expected to exceed 7,500 in 2019, and the sales volume of new machines is more than 66% compared with the same period last year. On the structure of the short boom pump truck growth slowed down, the long boom pump truck accounted for an increase in gross margin. Strict treatment of small tonnage agitator sales growth. In 2019, sany will account for more than 45% of the pump vehicle market and about 20% of the stirring vehicle market, fully benefiting from the high growth dividend of the industry.

Profit forecast and investment rating:

Based on the company's performance forecast and the expectation of infrastructure and real estate investment in 2020, the parent net profit of the company is estimated to be 11.2 billion yuan and 14 billion yuan respectively in 2019-2020. The current PE is less than 9 times. Buying & throughout; Rating!

Risk reminder: capital construction investment is less than expected, industry competition intensifies, raw material price fluctuates, new coronavirus progresses more than expected, etc.