On July 1, the British newspaper Financial Times released the 2011 list of the world’s 500 most valuable companies (FT Global 500) ranked by market capitalization. Sany Heavy Industry (Code: 600031) was put on the list of FT Global 500 for the first time, ranked 431st, with a market cap of 21.584 billion US dollars. Sany has become the first company listed among the world’s top 500 companies in China’s construction machinery industry.
Financial Times releases the world’s most valuable publicly traded companies every year, and this is the 15th such ranking. At present, FT Global 500 has become one of the most influential and noteworthy lists of commercial enterprises in the world. All companies to be included in the list must have at least 15% of the total shares as tradable shares. The value of non-tradable shares is not counted, and investment companies are excluded. FT Global 500 will give a comprehensive consideration of country of origin of the companies by a few factors, such as place of registration, main place of stock exchange, market place and so on.
In this freshly released list, America-based Exxon Mobil regained its top position with a market cap of 417.2 billion US dollars, and Petro China and Industrial and Commercial Bank of China (ICBC) were No. 2 and No. 4 with 326.2 billion US dollars and 251.1 billion US dollars respectively.
Since 2003 when Sany Heavy Industry went public, Sany has transformed itself from a leader in concrete machinery industry to an all-round construction machinery manufacturer of a broad range of construction machinery products.
Supported by years of outstanding performance, Sany has witnessed rapid growth in its market cap: on June 17, 2005, Sany conducted the split share structure reform and realized full circulation of its shares, and the market cap of Sany Heavy Industry then was about RMB 4 billion yuan; by June 30, 2011, the market cap of Sany Heavy Industry had soared to RMB 137 billion yuan, 33 times as much as 6 years ago. The compound annual growth rate (CAGR) was as high as 80%.
Sany’s entry into FT Global 500 is one more exciting event in China’s construction machinery industry besides its market cap hitting RMB 100 billion yuan on October 22, 2010. President of Sany Group Tang Xiuguo commented, “The market cap of a company reflects investors’ judgment on the company’s potential and prospect. In a sense, the ranking of market cap can better reflect the company’s competitiveness and brand influence compared with the ranking of pure sales revenue.”
Researcher of Industrial Securities Wu Hua pointed out that Sany Heavy Industry has been increasing market shares quickly by taking advantage of its leading position in the industry, resulting in remarkable sales increase. In the first half of this year, the sales revenue of Sany’s concrete machinery is expected to increase by 80% and that of excavators by 130%-140% year on year. According to Wind Info, even against the backdrop of a tightened macro economy in China, the stock price has risen by nearly 30% since the beginning of 2011, marking the fastest growth rate in the construction machinery industry.
President of Sany Heavy Industry Xiang Wenbo said that the key elements supporting Sany’s fast growing market cap are Sany’s excellent performance, enormous potential for growth and level of profitability. Industry data shows that, in the past 5 years, Sany’s sales revenue increased by nearly 10 times and its profit by about 20 times. According to the newly released “Five-Year Plan” of Sany Group, by 2015, Sany’s sales revenue will hit RMB 300 billion yuan and Sany will become a member of global 500 in terms of annual sales revenue.
Sources: Hunan Daily, China Securities Journal
Translated and Edited by Chen Wenbo
Click here to view 2011 FT Global 500