Our TP of Rmb25.0 is based on 2.8x 2025E P/B, derived from 2025E ROE (11.3%) and the average P/B over ROE (25x) over the past three years. Our P/B multiple for Sany reflects its improving ROE due to cost discipline and cycle turnaround.

Key downside risks that could impede share price from achieving our target price include: 1) delayed ending of machinery demand recovery due to weaker-for-longer property and infrastructure FAI; 2) worse-than-expected GPM; and 3) weaker-than-expected export sales growth.