[Great Wall Machinery? Deng Yuliang] Sany Heavy Industry? Research Update + Continued Recommendation?

English summary

1. Q2 Revenue: Overall revenue growth rate of 20%, overseas about 25%, domestic over 10%. 1. Q2 Gross Margin: Overseas gross margin improved QoQ and YoY. This was achieved despite a 0.5pct negative impact from FX. 3. FX: In H2, there is no YoY pressure from FX. Last year, Q3 FX loss was RMB 300 million, Q4 loss was RMB 600-700 million. YoY in H2, FX will contribute RMB 1 billion more profit. The hardest time has passed. 4. Profit: Q2 operating profit growth rate is over 40% by a few percentage points. Considering FX, it is also above 10%. Q3 growth rate will be higher. 5. Cash Flow: Net cash ratio of approximately 1.5x, still very good. 6. Q2 Overseas by Region: Except for Russia and the Middle East, the rest are fine. The Middle East accounts for a low proportion with high-quality customers. In terms of growth, the Middle East and Russia declined slightly, Africa +50%, Southeast Asia +20%+ (good performance, market share and scale surpass Komatsu), Europe exports +30%+, North America +30% above, #? North America profit turned positive + started a positive cycle, with net margin above 5%. Latin America growth is also 20%-30%. ...