After General Secretary Xi Jinping visited the company in September 2020, Sunward Intelligent (002097.SZ) once again ushered in a bright moment.

On the evening of March 22, 2021, Sunward Intelligent disclosed its 2020 annual report, and its performance exceeded expectations and hit a record high. The company's annual revenue was 9.377 billion yuan, a year-on-year increase of 26.25%; net profit was 565 million yuan, a year-on-year increase of 12.35%; net cash flow from operating activities was 1.804 billion yuan, a year-on-year increase of 144.64%.

Industry insiders pointed out that as one of the leading domestic equipment manufacturing companies, Sunward Intelligent has the advantage of independent innovation. Once the two major constraints of production capacity and marketing are gradually eliminated, it will have the possibility of catching up later, and the company's profit and valuation will have more room for imagination.

The release of production capacity drives high performance

Production capacity improvement is one of the key words of Sunward Intelligent's performance growth. In 2020, Sunward Intelligent's global headquarters will be relocated to Sunward Industrial City, and the scale of land occupation and automation will be increased accordingly, effectively solving the problem of limited production capacity, and the production capacity of the entire product line will be improved by leaps and bounds.

Based on this, the company's construction machinery sector revenue during the reporting period increased by 41.60% year-on-year, and net profit increased by 75.56% year-on-year. Among them, the sales revenue of piling products increased by 59.57% year-on-year, and the domestic market sales revenue increased by 71.27% year-on-year; the sales revenue of excavation machinery increased by 57.19% year-on-year, and the domestic market sales revenue increased by 75.05% year-on-year. The growth rate ranked first in the industry. Product and business structure Continuous optimization.

According to previous media reports, Sunward Intelligent has started the construction of Sunward Industrial City (Phase III).

"The hydraulic static pile driver, rotary drilling rig, excavator and other products developed and produced by the company are popular, especially in the face of complex geology and complex working conditions. Therefore, the company's production capacity and orders have been saturated for a long time." The relevant person in charge of Sunward Intelligent said, "Especially after the general secretary visited the company in September 2020, the company's reputation has been further improved. Although some of the capacity problems have been solved after moving from the old factory to the industrial city, the current orders are still in queue. Phase III After the project is put into production, it is believed that the shortage of supply in the market will be further eased."

Aviation business stabilizes against the trend

Since 2020, the new crown pneumonia epidemic has swept the world, and the aviation business has encountered the dilemma of reduced and grounded flights by customers around the world. Major domestic and foreign airlines have suffered serious losses and nearly shut down.

Affected by the epidemic, during the reporting period, Sunward's intelligent aviation business revenue fell by more than 40%, and its net profit fell by more than 90%, which caused a certain drag on the overall performance of listed companies.

Nevertheless, the newly adjusted AVMAX company’s operating team not only ensures the overall realization of positive profits and better operating net cash flow, but also lays a better foundation for subsequent development. The current operating conditions are far better than the overall performance of the industry. .

“Construction machinery is a typical investment-driven product, and its prosperity will be affected by the macro environment. It is superimposed on the replacement cycle of about 8-12 years, so there is a certain periodicity.” The relevant person in charge of the company introduced, “Chairman He Qinghua early At the beginning of the company’s establishment, there are pre-judgments. Therefore, the company is based on equipment manufacturing and simultaneously develops construction machinery, aviation equipment, and special equipment, sharing core technologies and manufacturing systems in the three major areas to enhance the company’s performance resilience and profitability."

According to reports, as early as 2002, Sunward Intelligent was involved in aviation business related fields, aiming at the two major markets of public transport aviation and general aviation.

The public transport aviation industry has relatively high barriers to entry and relatively high industry concentration. Leading companies have the first-mover advantage. At the same time, the scale of China's public transport aviation accounts for a small proportion of my country's transport market, and there is still a lot of room for development.

General aviation is one of the few industries in China that has not kept pace with the national economy since the reform and opening up. With economic growth and industrial upgrading, and the gradual increase in China's low-altitude openness, there are also many possibilities.

The international market will usher in substantial growth

From the perspective of industry development laws, entering the international market is the only way for Chinese equipment manufacturing companies, and it is also where the future profit growth and growth rate of listed companies will be.

In overseas markets, Sunward Intelligent has formed a certain number of overseas subsidiaries, offices, and agents with a business scope covering more than 180 countries and regions. Through the implementation of the "localization strategy", Sunward Intelligent's many overseas subsidiaries have continued to increase localized employees, and introduced senior general managers of foreign subsidiaries.

Sunward Intelligent said: "The localization strategy has greatly reduced the impact of the global epidemic on overseas trade. The company will achieve growth against the trend in Europe, the United States, Thailand and other regions in 2020."

In order to minimize the impact of the epidemic on offline marketing, Sunward Intelligent used big data to improve products, lay out online sales networks, and launched global brand promotion activities such as "Chairman Face to Face", "Offline Product Show + Online Live Broadcast", etc. Exposure and attention in domestic and foreign markets.

A few days ago, Sunward Intelligent realized the delivery of tailless mini excavators to Japan for the first time through online sales, and became the first well-known excavator brand in China to enter the Japanese market.

Japan is the world's second-largest construction machinery manufacturing country, with global construction machinery giants such as Komatsu. "The opening of the Japanese market by Sunward intelligent mini-excavators means that it has broken through the Japanese market's strict prevention of product performance, configuration, and operability, and has enhanced the influence of Chinese manufacturing in the international market." Insiders pointed out.

According to the opinions of many institutions such as GF Securities and Galaxy Securities, it has entered a new stage of development during the "14th Five-Year Plan". Domestic policies continue to promote the high-quality development of the manufacturing industry, and the construction machinery industry will usher in many definite opportunities. With the substantial improvement in product strength of my country's construction machinery, the strengthening of brand channels and the gradual emergence of manufacturing cost advantages, major leading companies are expected to continue to expand their share in overseas markets. Data show that since 2021, China's construction machinery exports have continued to rise. Compared with the same period last year, Sunward's overseas shipments have nearly doubled.

On March 15, 2021, Sunward Intelligent has disclosed the performance forecast for the first quarter of 2021. The company expects that the net profit attributable to shareholders of listed companies in the first quarter will be 244 million to 311 million yuan, an increase of 80% to 130% over the same period in 2020. For more details, please refer to the official website of Sunward Intelligent. See Daowang Machinery Column Editor/Ge Siyu