On May 18, the 6th XCMG International Customer Festival officially commenced, attracting over 1,200 clients from more than 60 countries to the XCMG headquarters. The event showcased an impressive array of engineering machinery, including the “Steel Mantis” featured in the film “The Wandering Earth 2,” a 3000-ton ultra-large wheeled crane destined for South America, and the newly crowned “World’s Largest Crane” XCA4000, all prominently displayed at XCMG’s crane manufacturing base.
At the opening ceremony, Yang Dongsheng, Chairman and Party Secretary of XCMG Group and XCMG Machinery, highlighted the company’s achievements in 2023: four consecutive years of revenue surpassing 100 billion yuan, dominance in 16 main machine markets within China, doubling revenue from new energy products, and international revenue accounting for over 40% of the total. “As the first Chinese construction machinery brand to go global, internationalization has always been XCMG’s main development strategy,” Yang stated.
Yang elaborated, “At the end of last year, we established the International Business Headquarters and 14 global regions to focus on overseas markets and segments. This initiative aims to enhance our global operational capabilities and provide integrated solutions and full lifecycle services to our global customers.”
In a media briefing, Yang expressed optimism about the export market’s continued positive trend and anticipated growth in international revenue. Despite the domestic construction machinery sector experiencing a downturn, policies like the issuance of one trillion yuan in special government bonds and large-scale equipment renewals, along with the transition to electrification and new energy technologies, are expected to boost the domestic market. In the long term, the construction machinery industry has significant growth potential, shifting from investment-driven growth to high-quality, value-driven development, steering the industry towards mid-to-high-end transformation.
XCMG Group, a leading enterprise in China’s construction machinery sector, engages in the research, manufacturing, sales, and service of various machinery, including lifting, earthmoving, compacting, road construction, piling, fire-fighting, sanitation, and other engineering machinery and spare parts. Its products are widely used in infrastructure construction, real estate development, large-scale engineering projects, disaster relief, transportation, and natural resource extraction.
On August 29, 2022, XCMG Machinery (000425), a core listed company under XCMG Group, completed its merger with XCMG Construction Machinery Co., Ltd. (XCMG Ltd.), achieving a consolidated listing. Post-merger, XCMG Ltd.’s assets related to excavating machinery, concrete machinery, mining machinery, and tower cranes were integrated into XCMG Machinery.
Reflecting on the post-merger operations, Yang emphasized the importance of solidifying the company’s fundamentals, enhancing communication with the capital market and investors to boost confidence in XCMG’s strategic direction, and ensuring thorough information disclosure.
In recent years, the international market has been a key focus for XCMG Machinery, with a steadily increasing proportion of overseas revenue. In 2023, XCMG Machinery reported revenue of 92.848 billion yuan, a slight decrease of 1.03%, while net profit grew by 23.51% to 5.326 billion yuan. Overseas revenue surged by 33.7% to 37.22 billion yuan, comprising 40.09% of total revenue.
In the first quarter of 2024, XCMG Machinery achieved revenue of 24.174 billion yuan, up 1.18%, and net profit of 1.6 billion yuan, a 5.06% increase. Yang noted that overseas revenue accounted for approximately 44% of the total in the first quarter.
It is notable that XCMG Machinery’s overseas revenue proportion was about 29% in 2022, approximately 15% in 2021, and less than 10% in 2020.
Discussing the significance of the XCMG International Customer Festival, Yang remarked, “We want international customers to visit our factories, witness the quality of XCMG’s products, and gain a deeper understanding of our capabilities. This direct interaction with our technical and management teams helps us better understand our customers’ needs.”
Yang is confident that surpassing high-end international brands is a matter of time for Chinese construction machinery, estimating a timeframe of 10 to 20 years for this achievement.
Comparing with global construction machinery giants, Yang acknowledged that Chinese companies have substantial room for growth in aftermarket services.
In the new energy sector, Yang highlighted XCMG Group’s efforts in developing globally leading products like large-tonnage hybrid all-terrain cranes, long-range hydrogen fuel tractors, and high-pressure lithium battery forklifts, based on pure electric, hybrid, and hydrogen energy technologies. The company is also advancing the green transformation of its supply chain by investing in core component industries such as battery cells, electric motors, and controllers, and establishing charging and swapping station infrastructure. XCMG’s comprehensive new energy solutions are already widely applied in urban construction, mining, ports, and highway transportation worldwide.
Yang revealed that last year, the electrification rate of XCMG’s main products reached 10%. With technological advancements and cost reductions, this rate is expected to rise to at least 20% by 2025-2026.
“XCMG will uphold its mission of ‘Leading the Future of Construction Technology, Building a Better World.’ Amid the new technological revolution and industrial transformation, we are vigorously promoting the application of artificial intelligence to deliver safe, reliable, advanced, efficient, and environmentally friendly products and services, empowering customers globally,” Yang concluded.
Since the start of 2024, XCMG Machinery’s market capitalization has risen by 40.48%. As of May 21, XCMG Machinery’s stock closed at 7.67 yuan per share, with a total market capitalization of 90.63 billion yuan.