Sinotruk (3808 HK) Company Update
Key Highlights:
- Earnings Forecast: The company's 2024E and 2025E earnings forecasts have been revised downward by 5% and 2% respectively, reflecting the new industry heavy-duty truck (HDT) sales forecast.
- Earnings Outlook: The forecast predicts a ~20% YoY earnings decline in the second half of 2024 (2H24), followed by recovery in 2025E.
- Target Valuation: The target price has been revised to HK$21.4 (previously HK$19.5), based on a 4.5x EV/EBITDA multiple (historical average).
- Risk Assessment: The current share price does not fully reflect the earnings downside risk, particularly after recent rallies.
Upside Risks:
- Stronger-than-expected replacement demand.
- Further expansion into new overseas markets.
Downside Risks:
- Further weakness in export sales.
- Lack of recovery in China.
Financial Summary:
- Revenue: Projected revenues for 2024E, 2025E, and 2026E are RMB 91,906 million, RMB 97,978 million, and RMB 104,067 million respectively.
- Operating Margin: Operating margins for 2024E, 2025E, and 2026E are expected to be 5.1%, 5.6%, and 5.0% respectively.
- Net Profit: Projected net profits for 2024E, 2025E, and 2026E are RMB 5,685 million, RMB 6,167 million, and RMB 6,535 million respectively.
Valuation:
- P/E Ratio: Projected P/E ratios for 2024E, 2025E, and 2026E are 10.2, 9.4, and 8.9 respectively.
- P/B Ratio: Projected P/B ratios for 2024E, 2025E, and 2026E are 1.3, 1.2, and 1.2 respectively.
- Dividend Yield: Dividend yields for 2024E, 2025E, and 2026E are 4.9%, 5.3%, and 5.6% respectively.
Share Performance:
- Current Price: The current price is HK$23.15.
- Historical Performance: The stock has shown strong performance in the last 12 months, with a 35.9% return in the 3-month period ending October 2024.
Analyst Insight:
- Rating: Maintain HOLD.
- Upside Risks: Stronger-than-expected replacement demand and further expansion into new overseas markets.
- Downside Risks: Further weakness in export sales and lack of recovery in China.
Key Figures:
- Market Capitalization: HK$63,917.2 million.
- Average Monthly Trading Volume: HK$85.0 million.
- 52-Week High/Low: HK$24.65/13.50.
- Total Issued Shares: 2,761 million shares.
Ownership Structure:
- CNHTC: 51.0% ownership.
- MAN SE: 25.0% ownership.
This summary provides an overview of the key financial metrics, earnings forecast, and risk assessment for Sinotruk (3808 HK) as of October 2024.
