CLSA has issued a research report on SANY INT'L (00631), stating that its first-quarter results have raised market concerns. While overseas revenue doubled year-on-year, profit margins and cost control fell short of expectations. The firm has cut its net profit forecasts for SANY INT'L for 2026 and 2027 by 28% and 19%, respectively, to reflect margin pressures. Consequently, it has lowered the target price from HK$16 to HK$12, while maintaining an 'Outperform' rating.

The report notes that SANY INT'L's first-quarter solar sales declined 74% year-on-year, resulting in a loss of RMB 120 million. Management anticipates the full-year loss to exceed RMB 400 million, primarily due to staffing costs in the microgrid business and initial investments in overseas project expansion, which have surpassed market expectations.

Overall, CLSA believes the company will remain in market focus. Although robust demand for mining equipment and the electrification trend continue to drive market share gains, losses from its emerging businesses are expected to take time to resolve.