The Highlights of XCMG Machinery's 2023 Semi-annual Report

On the evening of August 30th, XCMG Machinery (000425, “XCMG”) released its 2023 semi-annual report. The report indicates that XCMG's key indicators, such as operating income, net profit attributable to shareholders of the listed company, and weighted average return on net assets, ranked first among major publicly traded companies in China’s construction machinery industry.

Profitability improved quarter by quarter, with key indicators ranking first.

• Quarterly revenue saw a slight increase.

Total revenue was 51.28 billion, down 4.8% year-on-year. Among them, in the second quarter, it was 27.38 billion, showing a marginal 0.1% year-on-year increase.

• Net profit significantly increased.

Attributable net profit was 3.59 billion, down 2.1% year-on-year. In the second quarter, it was 2.06 billion, showing a 30.9% year-on-year increase.

• Gross profit margin improved year-on-year and quarter-on-quarter.

The gross profit margin was 22.86%, up by 2.44 percentage points year-on-year. In the second quarter, it was 22.88%, up by 3.34 percentage points year-on-year, and up by 0.04 percentage points quarter-on-quarter compared to the first quarter.

• Accounts receivable decreased during the quarter.

Accounts receivable (net value for single items) was 44.41 billion, decreasing by 2.3 billion in the quarter. Accounts receivable (net value for the overall scope) was 51.05 billion, decreasing by 22.1 billion in the quarter.

• Inventory decreased compared to the beginning of the year.

Inventory (net value) was 35.32 billion, increasing by 410 million in the quarter but decreasing by 330 million compared to the beginning of the year.

• Sales net profit margin improved year-on-year.

Attributable sales net profit margin was 7%, up by 0.19 percentage points year-on-year. In the second quarter, it was 7.54%, showing a 1.77 percentage point increase year-on-year.

• The asset-liability ratio decreased.

At the end of the first half of the year, the asset-liability ratio was 67.45%, down from 68.78% at the end of the previous year, a decrease of 1.33 percentage points.

• Market share increased.

The market share for the main product category reached 25.47%, showing a year-on-year increase of 1.93 percentage points.

Milling machines and asphalt plants have advanced to become the leaders in the domestic industry.

As of now, 15 key product categories have achieved the top position in the domestic industry in terms of market share.

Accelerating international expansion, export revenue reaching new highs.

• Increase in the proportion of international revenue.

Achieved international revenue of 20.9 billion yuan, showing a year-on-year growth of 33.5%.

• High-speed growth in most regions:

Western Asia, North Africa, and Central America grew by over 200%.

Central Asia and North America saw growth of nearly 100%.

Europe experienced growth exceeding 150%.

Adapting to industry trends, multiple sectors flourish.

• Many products experienced high-speed growth:

Aerial work platforms, milling machinery, and fire trucks grew by over 300%.

All-terrain cranes, mobile cranes, port cranes, and skid-steer loaders grew by over 100%.

Crawler cranes, mining excavators, road rollers, pavers, and concrete mixers grew by over 50%.

Excavators and off-road cranes saw a 20% increase.

• Increase in the proportion of revenue from new industries.

Revenue from strategic emerging industries such as fire protection, mining machinery, environmental equipment, port machinery, forklifts, and agricultural machinery reached 12.3 billion yuan, showing a year-on-year growth of 44.5%. This accounted for 23.99% of total revenue, representing an increase of 8.18 percentage points year-on-year.

The aerial work machinery sector saw a revenue growth of 56.43%, while the mining machinery sector experienced a revenue growth of 40.86%.

• Significant growth in revenue from new energy products.

Achieved a year-on-year revenue increase of 174.9% for new energy products.

Driving technological self-reliance and leading high-speed development of industrial clusters.

In June of this year, XCMG officially unveiled several significant achievements including the launch of the 35m³ electric shovel, the delivery of the third 700-ton hydraulic excavator to customer, and the introduction of the XDE440 mining truck in South America. XCMG has intensified its R&D efforts, showcasing concentrated results in high-level technological self-reliance.

During the first half of the year, XCMG successfully implemented its innovation system, guided by a focus on high-end development. It established a '1+6+N' R&D system led by the XCMG Research Institute, with collaboration from the headquarters' R&D institutions and various industry-specific R&D organizations, and launched more than 280 new products. Additionally, XCMG signed a strategic cooperation agreement with Toyota to support research in hydrogen technology and breakthroughs across the entire industry chain.

Faced with a complex and rapidly changing market environment, the 'New XCMG' has been steadfastly advancing the 'Intelligent and Digital Transformation', with a focus on the “high-end, intelligent, green, service-oriented, and internationalized” development. This has resulted in high-quality and outstanding performance.