Lyon: Lower SANY INT'L (00631) target price to HK$12, continued to give "outperform market" rating.

Lyon released a research report stating that SANY INT'L (00631) first-quarter performance has raised concerns in the market. Although overseas revenue doubled year-on-year, profit margin and cost control did not meet expectations. The bank cut the company's net profit forecasts for 2026 and 2027 by 28% and 19%, respectively, to reflect the pressure on profit margins, and lowered its target price from 16 Hong Kong dollars to 12 Hong Kong dollars, maintaining an "outperform" rating. The bank mentioned that CECEP Solar Energy, a subsidiary of SANY INT'L, saw a 74% year-on-year decrease in sales in the first quarter and recorded a loss of 120 million Chinese yuan. Management expects a full-year loss of over 400 million Chinese yuan, mainly due to initial investments in personnel and overseas project expansions in the microgrid sector, which exceeded market expectations. Overall, the bank believes that the company will still be a focus of the market, as strong demand for mining equipment and the trend of electrification continue to drive its market share higher, but losses from emerging businesses will take time to resolve.