Sany Heavy - H/A: Core business accelerates, de-rating due to FX drag unjustified as cycle strengths; 2Q26 preview, stay OW

Research evidence excerpt

Sany Heavy - H/A: Core business accelerates, de-rating due to FX drag unjustified as cycle strengths; 2Q26 preview, stay OW

Karen Li, CFA Asia Pacific Equity Research

(852) 2800-8589 28 July 2026

karen.yy.li@jpmorgan.com

Equity Ratings and Price Targets

Mkt Cap Price Rating Price Target

Company Ticker ($ mn) CCY Price Cur Prev Cur End Prev End Date

Date

Sany Heavy Industry - A 600031 CH 26,776 CNY 19.70 OW n/c 29.00 Dec-27 31.00 Jun-27

Sany Heavy Industry - H 6031 HK 23,942 HKD 20.42 OW n/c 31.00 Dec-27 34.00 Jun-27

Source: Company data, Bloomberg Finance L.P., J.P. Morgan estimates. n/c = no change. All prices as of 28 Jul 26.

Updating our model; 2Q26 preview

Our 2Q26 preview points to robust underlying operations and high-single-digit

Y/Y net profit growth despite a continued FX drag

We estimate Sany will deliver c.Rmb2.9B net profit in 2Q26, up c.5-10% Y/Y, even

after absorbing another c.Rmb1B non-cash FX translation loss, which is similar to

1Q26. We expect 2Q26 revenue and operating profit to both improve Q/Q, with

management guiding for operating profit growth of c35% Y/Y, supported by stronger

demand, ongoing overseas share gains, and margin improvement from mix and cost-

down. Our preview highlights that FX remains the only meaningful drag on reported

profit, while the core business continues to accelerate.

Our model update reflects only the non-cash FX loss, with no change to our

positive view on cash flow and value

We cut FY26E NPAT by 14% solely to reflect a full-year FX loss assumption of

c.Rmb2B, with no change to our cash flow or revenue forecasts. Management

reiterated that FX losses are accounting translation, not cash leakage, and that foreign

currency balances remain available for overseas operating needs. Our DCF-based PT