Group 1 - Jianbang High-Tech submitted its listing application to the Hong Kong Stock Exchange, focusing on silver powder production for photovoltaic silver paste, with 2024 revenue of approximately 3.95 billion yuan, a year-on-year increase of 41.99% [1] - The company reported a gross profit of 131 million yuan, up 21.96% year-on-year, and a net profit of about 79 million yuan, reflecting a 31.95% increase [1] - Jianbang High-Tech aims to leverage its listing opportunity to expand its market presence and enhance competitiveness in the photovoltaic silver powder sector [1] Group 2 - Weixin Jinke announced that its minimum public shareholding has been restored, with approximately 163 million shares held by the public, accounting for 33.34% of total issued shares [2] - This restoration is crucial for maintaining the company's listing status and enhancing market confidence [2] - The company needs to continue monitoring its public shareholding to comply with relevant regulations and improve business performance [2] Group 3 - Weihong Group Holdings announced a further delay in publishing its 2024 annual results, now expected on May 12, due to incomplete bank confirmations and valuation reports [3] - The company's shares have been suspended from trading since April 1, 2024, indicating significant challenges in financial reporting [3] - The uncertainty surrounding the financial data may affect investor confidence and market perception of the company's financial health [3] Group 4 - China Longgong reported investments in various wealth management products, with unredeemed principal amounts of approximately 1.246 billion yuan in Bank of China products, 1.126 billion yuan in CCB products, 620 million yuan in CITIC products, and 410 million yuan in Minsheng products [4] - This diversified investment strategy reflects the company's cautious approach to fund management and risk diversification [4] - However, the high unredeemed principal amounts indicate potential market and liquidity risks that investors should monitor [4] Group 5 - Xunzhong Co., a new third board innovative layer enterprise, submitted its listing application to the Hong Kong Stock Exchange, previously having filed a prospectus on July 26, 2024 [5] - The company is positioned as a leading provider of intelligent cloud communication services, holding a 1.8% market share in China's cloud communication service market in 2023 [5] - The renewed listing application demonstrates the company's commitment to expanding its international market presence and enhancing its competitiveness in the global cloud communication sector [5] Group 6 - The Hang Seng Index closed at 22,504.68, with a gain of 1.74% on May 2 [6] - The Hang Seng Tech Index rose by 3.08%, closing at 5,244.06 [6] - The National Enterprises Index increased by 1.92%, ending at 8,231.04 [6]

Financial Performance - The company achieved a revenue of HKD 11.068 billion for the year ended December 31, 2024, with a net profit of HKD 1.104 billion, representing a year-on-year increase of 58%[8]. - Operating profit increased by 50.62% to RMB 1.232 billion, while EBITDA rose by 36.44% to RMB 1.490 billion[6]. - The company maintained a cash flow from operating activities of RMB 1.48 billion, with total cash and financial assets amounting to RMB 7.773 billion at year-end[8]. - The company’s debt-to-asset ratio improved to 31%, indicating a healthier financial position compared to previous years[8]. - The total revenue for the reporting period was RMB 10,214 million, a decrease of 2.94% compared to RMB 10,523 million in the same period last year[15]. - The net profit for the year reached RMB 1,019 million, an increase of 57.80% from RMB 646 million in the previous year[15]. - The comprehensive gross profit margin improved to 19.56%, up 2.03 percentage points from 17.53% in the same period last year[15]. - Gross profit increased by 8% to RMB 1,998 million in 2024, up from RMB 1,845 million in 2023, with the gross margin rising from 18% to 20%[29]. - Other income rose to RMB 129 million in 2024 from RMB 125 million in 2023, driven by government subsidies and VAT deductions[30]. - The company achieved a significant turnaround in other gains and losses, moving from a loss of RMB 100 million in 2023 to a gain of RMB 57 million in 2024[31]. Sales and Market Position - The domestic sales volume of loaders continues to hold the industry’s top position, while forklifts secured a place among the top three in the industry[9]. - Sales of loaders accounted for 41.23% of total sales, slightly increasing by 0.04 percentage points from the previous year[15]. - The sales revenue of excavators decreased by 16.08% to approximately RMB 1,055 million, primarily due to a shift in pricing strategy[20]. - Export sales increased by 3.76% to RMB 3,190 million, highlighting the company's successful expansion in international markets[16]. - The sales revenue of forklifts reached approximately RMB 3,718 million, a slight increase of 1.61% from RMB 3,659 million last year[19]. - The company aims to enhance its market influence both domestically and internationally to ensure sustainable growth and profitability[17]. Research and Development - The company has increased its investment in R&D, focusing on technology upgrades and the development of new energy products[9]. - The company plans to focus on innovation and product development, emphasizing "green, intelligent, and high-end" R&D principles to enhance competitiveness[37]. Dividends and Reserves - The company plans to distribute a dividend of HKD 0.13 per share, with a payout ratio of 50% of net profit[8]. - The group reported a final dividend of HKD 0.08 per share for the fiscal year ending December 31, 2023, totaling HKD 342 million (approximately RMB 311 million) distributed to shareholders[49]. - The board proposed a final dividend of HKD 0.13 per ordinary share for the fiscal year ending December 31, 2024[50]. - The total distributable reserves of the company as of December 31, 2024, amounted to approximately RMB 7,921 million, an increase from RMB 7,206 million in 2023[55]. Operational Efficiency - Inventory turnover days decreased from 136 to 115 days, showcasing enhanced operational efficiency[6]. - Inventory decreased by 20% to RMB 2,287 million from RMB 2,877 million, reflecting improved inventory management in response to declining sales[33]. - Trade receivables increased by 19% to RMB 2,377 million from RMB 1,995 million, attributed to extended credit terms for high-value products[34]. Governance and Compliance - The company has adopted the standard code of conduct for securities trading as per the listing rules, and all directors confirmed compliance for the year ending December 31, 2024[105]. - The board consists of 8 members, including 4 executive directors, 1 non-executive director, and 3 independent non-executive directors[107]. - The company has established a risk management and internal control system, which is regularly reviewed by the audit committee[114]. - The company emphasizes the importance of independent non-executive directors in providing objective opinions for effective governance[111]. - The company has mechanisms in place to ensure that any director with a conflict of interest abstains from discussions and votes on related matters[123]. Environmental, Social, and Governance (ESG) - The company is committed to improving environmental performance and reducing pollution during production processes[75]. - The company aims to become a "respected global leader in engineering machinery operations" and is dedicated to sustainable development and social responsibility[146]. - The ESG governance structure consists of the Board of Directors, an ESG working group, and executive departments, ensuring comprehensive oversight and management of ESG-related activities[147]. - The company has established insider information disclosure procedures to ensure timely assessment of matters that may significantly impact stock prices[127]. - The company emitted 214,336.4 tons of CO2, 0.43803 tons of methane, and 0.05776 tons of nitrous oxide in 2024[158]. - The company discharged 562,349 tons of wastewater, achieving a 100% compliance rate with GB/T 31962-2015 standards[158]. - The company has adopted the ISO 14001 environmental management system and set emission reduction targets in response to climate change policies[165]. Employee Relations - Employee satisfaction regarding the working environment reached 99%, with the company adhering to strict occupational health and safety regulations[171]. - The company provides various employee benefits, including holiday bonuses, maternity benefits, and health check-ups, to ensure a supportive work environment[166]. - The company conducts regular training programs to enhance employee skills and knowledge, focusing on professional development and leadership training[172]. Supplier Management - The company has established a strict supplier management system, ensuring that all products must sign a technical agreement before procurement to control quality from the source[181]. - The company emphasizes supplier risk identification and assessment, implementing necessary supervision and inspection of supplier production sites[178]. - The company has set up a quality information reporting platform to ensure timely processing of quality information and has created a quality case manual for internal sharing[185]. Risk Management - The company faces market risks due to potential declines in demand for its products in the engineering machinery industry, which has entered a relatively stable period after years of rapid growth[90]. - The group’s receivables account for 18% of total assets, indicating significant exposure to credit risk influenced by overall economic conditions[196]. - Management's assessment of expected credit losses involves significant judgments and assumptions, including customer payment patterns and macroeconomic factors[196].

Group 1: Transformation and Upgrading - Longjin Environmental Protection is actively transforming by leveraging its core strengths in environmental equipment while expanding into the renewable energy sector, aiming to create a "second growth curve" through various initiatives such as mining solar energy and energy storage systems [1][13][23] - Longgong Group focuses on "green, intelligent, and high-end" development, achieving record monthly sales of electric loaders and forklifts, which accounted for 77.6% of total revenue last year [2][4][17] - Longyan Kaolin achieved a 10.5% increase in net profit despite only a 2% revenue growth, driven by the development of comprehensive utilization technologies for kaolin tailings and porcelain stone [5][19] Group 2: Cost Control and Efficiency Improvement - Longyan Kaolin has implemented a strict procurement system and monthly production planning to optimize costs and improve efficiency, resulting in a reduction of total inventory from 2.877 billion to 2.287 billion [10][12][24] - Longjin Environmental Protection managed to achieve a 63.15% increase in net profit despite a 12.75% decline in revenue from environmental equipment manufacturing, showcasing effective cost control and resource reallocation [13][24] - Longgong Group reported a 57.80% increase in net profit while revenue decreased by 2.94%, indicating successful cost control measures and improved operational quality [12][33] Group 3: Market Expansion - Zijin Mining achieved a 52% increase in net profit last year and a 62% increase in the first quarter of this year, supported by its extensive overseas operations in 16 countries and 17 provinces in China [6][16][28] - Longgong Group's export sales increased by 3.76% to 3.19 billion, highlighting successful market expansion despite domestic sales challenges [17][29] - Longjin Environmental Protection has expanded its engineering projects to over 50 countries, focusing on industrialization processes in ASEAN and Belt and Road countries to drive new business growth [18][30]

Group 1 - Heavy machinery stocks in Hong Kong experienced a general rise, with Zoomlion (000157) increasing over 5%, SANY International rising over 4%, and China Longgong up 1.5% [1][2] - CME forecasts that excavator sales will reach 28,500 units by March 2025, representing a year-on-year increase of 14%, with domestic sales expected to be 18,500 units (+22% YoY) and exports at 10,000 units (+2% YoY) [2] - Dongwu Securities predicts a better-than-expected recovery in excavator sales, supported by high growth in water conservancy investment for small excavators, stabilization in real estate and infrastructure for medium excavators, and stable demand from mining for large excavators [2]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected investment return exceeding 15% over the next 6-12 months [5][6]. Core Views - The company achieved a significant increase in net profit, with a 57.8% year-on-year growth, despite a 2.9% decline in revenue [1]. - The domestic engineering machinery demand is recovering, and the company is expected to benefit from this trend, along with the internationalization and electrification of machinery [5]. - The company is positioned to capitalize on the accelerating trend of electrification in loaders, with electric loader sales increasing by 261.2% in early 2025 [4]. Summary by Sections Financial Performance - In 2024, the company reported revenue of 10.21 billion RMB, a decrease of 2.9% year-on-year, while net profit reached 1.02 billion RMB, up 57.8% [1]. - The gross margin improved to 19.6%, an increase of 2.0 percentage points, and the net margin rose to 10.0%, up 3.8 percentage points [1]. - The company plans to distribute a dividend of 0.13 HKD per share, with a payout ratio of 50% and a dividend yield of approximately 6.4% [1]. Product Performance - Revenue from wheel loaders was 3.93 billion RMB, down 3.1% year-on-year, while mini wheel loaders saw a revenue increase of 5.9% to 160 million RMB, indicating strong demand in agriculture and light construction [2]. - Forklift revenue rose by 1.6% to 3.72 billion RMB, driven by increased demand in the logistics and warehousing sector [2]. - Excavator revenue decreased by 16.1% to 1.06 billion RMB, primarily due to a shift to discount promotion strategies [2]. Market Trends - Domestic sales revenue was 7.02 billion RMB, down 5.7% year-on-year, attributed to weakened demand in the construction sector [3]. - The company’s overseas revenue reached 3.19 billion RMB, a year-on-year increase of 3.8%, with overseas sales accounting for 31.2% of total revenue, up 2.0 percentage points [3]. - The government’s fiscal policies are expected to stimulate infrastructure investment, benefiting downstream equipment demand [3]. Electrification Trend - The sales of electric loaders in early 2025 reached 2,413 units, a remarkable increase of 261.2%, with an electrification rate of 14.5%, up 12.0 percentage points year-on-year [4]. - The company is well-positioned as a leading player in the electric loader market, benefiting from the accelerating electrification trend [4].

Group 1 - The rental index for aerial work platforms in February 2025 is projected to be 350 points, reflecting a month-on-month decrease of 21.4% but a year-on-year increase of 34.1% [1] - Excavator sales in March 2025 are expected to reach 28,500 units, representing a year-on-year increase of 14%, with domestic sales of 18,500 units (up 22% year-on-year) and exports of 10,000 units (up 2% year-on-year) [1] - Cumulative excavator domestic sales from January to March 2025 are projected at 35,545 units (up 34% year-on-year), while cumulative exports are expected to be 24,737 units (up 5% year-on-year), indicating a marginal recovery in both domestic and international demand [1] Group 2 - Dongwu Securities predicts that the improvement in excavator sales is primarily due to the replacement of aging equipment, as the previous upcycle lasted from 2015 to 2023, with an average lifespan of 8-10 years for excavators [1] - The financial environment has improved since Q4 2024, providing support for both existing and new projects, which is expected to further bolster demand for excavators [1] - The report anticipates that high growth in water conservancy investment will support small excavators, while stabilization in real estate and infrastructure development will benefit medium-sized excavators, and stable demand from mining will support large excavators [1] Group 3 - Pacific Securities reports that the export data for excavator products in January and February 2025 continues to show high year-on-year growth, contributing significantly to the profits of major manufacturers [2] - The positive trend in exports is expected to enhance profit margins for manufacturers, with a favorable overseas demand environment anticipated to positively impact their performance [2] - The engineering machinery sector is viewed positively by the market, with expectations of continued growth in exports and overall industry performance [2] Group 4 - Related Hong Kong-listed companies in the engineering machinery sector include Zoomlion Heavy Industry (000157), China Longgong (03339), First Tractor Company (00038), Sany International (00631), Zhengzhou Coal Mining Machinery (601717), China National Heavy Duty Truck Group (000951), Weichai Power (000338), and Sany International (02155) [3]

Core Viewpoint - China Longgong (03339) reported a significant increase in net profit for the fiscal year ending December 31, 2024, with a profit attributable to shareholders of RMB 1.018 billion, representing a year-on-year increase of 57.78% [1][2] Financial Performance - The total revenue for the reporting period was RMB 10.214 billion, a decrease of 2.94% compared to RMB 10.523 billion in the same period of 2023 [2] - The company's earnings per share were RMB 0.24, and a final dividend of HKD 0.13 per share was proposed [1] - The overall gross profit margin for the period was 19.56%, an increase of 2.03 percentage points from 17.53% in the previous year [2] Product Performance - The product structure is primarily focused on loaders and forklifts, with loaders accounting for 41.23% of total sales, a slight increase from 41.19% in 2023 [2] - Forklift sales represented 36.41% of total sales, up by 1.63 percentage points year-on-year [2] - The sales proportion of excavators decreased by 1.61 percentage points to 10.34% due to adjustments in sales strategy [2] Market Dynamics - The domestic market for construction machinery is stabilizing but still in a bottoming phase, while the overseas market continues to grow, albeit at a slower pace [1] - The company has successfully predicted the growth trend of electric products, leading to record monthly production and sales of electric loaders [2] - Export revenue increased by 3.76% year-on-year, reflecting the company's ability to adapt to high baseline conditions in the industry [2] Strategic Focus - The company emphasizes high-quality development principles, actively responding to changing market conditions, and increasing marketing investments [1] - Continuous improvement in product quality and cost control has contributed to the significant increase in net profit [2] - Financial assets generated a net income of RMB 60 million during the reporting period [2]

Financial Performance - For the fiscal year ending December 31, 2024, the total revenue was RMB 10,213,556, a decrease of 2.9% compared to RMB 10,522,925 in 2023[4] - Gross profit increased to RMB 1,998,114, representing a growth of 8.3% from RMB 1,844,980 in the previous year[4] - The net profit for the year was RMB 1,018,639, up 57.7% from RMB 645,544 in 2023[5] - Basic and diluted earnings per share rose to RMB 0.24, compared to RMB 0.15 in the prior year, reflecting a 60% increase[5] - The company reported a total comprehensive income of RMB 1,033,086, compared to RMB 605,216 in the previous year, marking a significant increase[7] - The total revenue for the reporting period was RMB 10,214 million, a decrease of RMB 309 million or 2.94% compared to RMB 10,523 million in the same period last year[57] - Net profit for the year reached RMB 1,019 million, an increase of RMB 373 million or 57.80% compared to RMB 646 million in the previous year[57] Revenue Breakdown - Total revenue for the engineering machinery segment reached RMB 10,213,556 thousand, with a segment profit of RMB 1,041,850 thousand[24] - Revenue from wheel loaders was RMB 4,211,545 thousand, accounting for 41.2% of total revenue, while excavators generated RMB 1,055,621 thousand, representing 10.3%[26] - Revenue from mainland China was RMB 7,023,569 thousand, a decrease from RMB 7,448,464 thousand in the previous year, while revenue from overseas increased to RMB 3,189,987 thousand from RMB 3,074,461 thousand[28] - Sales of wheel loaders accounted for 41.23% of total sales, slightly up from 41.19% in the previous year[57] - Export sales increased by 3.76% to RMB 3,190 million, partially offsetting the decline in domestic sales[58] Expenses and Investments - Research and development expenses were RMB 447,511, slightly up from RMB 437,700 in 2023, indicating continued investment in innovation[4] - Capital expenditures for the year were RMB 68,549 thousand, which included the acquisition of property, plant, and equipment[24] - Capital expenditures for the period amounted to approximately RMB 69 million, down from RMB 152 million in 2023, aligning with the group's strategic transformation[68] Assets and Liabilities - Total assets decreased to RMB 12,463,367 from RMB 12,480,883 in 2023, showing a marginal decline[8] - Current liabilities decreased to RMB 4,712,868 from RMB 5,591,403, indicating improved financial stability[9] - The company’s net asset value rose to RMB 10,704,093 from RMB 9,981,520, reflecting a solid financial position[9] - Total assets amounted to RMB 15,474,995 thousand, while total liabilities were RMB 4,770,902 thousand[24] - Total assets amounted to RMB 15,623,542 thousand, with total liabilities at RMB 5,642,022 thousand[25] Trade Receivables and Inventory - Trade receivables increased to RMB 2,377,319 from RMB 1,994,901, suggesting growth in sales and credit extension[8] - Trade receivables increased significantly from RMB 1,995 million to RMB 2,377 million, attributed to extended credit terms for high-value products[76] - The company's inventory decreased to RMB 2,287,310,000 in 2024 from RMB 2,876,507,000 in 2023, a reduction of 20.5%[37] Dividends and Shareholder Information - The proposed final dividend per ordinary share for 2024 is HKD 0.13, an increase from HKD 0.08 in 2023, totaling RMB 513,514,000 compared to RMB 310,513,000 in the previous year[33] - The board proposed a final dividend of HKD 0.13 per share for the year ending December 31, 2024, subject to shareholder approval[94] - There was no interim dividend paid during the year[90] Financial Standards and Compliance - The company has adopted revised Hong Kong Financial Reporting Standards, with no significant impact on its financial position or performance[19] - The company has not engaged in supplier financing arrangements, thus the related revisions do not affect its financial statements[19] - The company will apply new and revised Hong Kong Financial Reporting Standards upon their effective date, with no expected significant impact[22] Future Outlook and Strategy - The group anticipates a rebound in domestic demand for construction machinery, supported by government policies aimed at boosting consumption and investment[78] - The company aims to enhance its product offerings with a focus on green, intelligent, and high-end development, while expanding marketing channels and improving operational efficiency[79] - The company aims to strengthen its influence in both domestic and international markets to ensure sustainable growth and profitability[59]

Financial Performance - For the six months ended June 30, 2024, the revenue was RMB 5,360,093 thousand, a decrease of 6.39% compared to RMB 5,726,128 thousand for the same period in 2023[6]. - Operating profit increased by 52.66% to RMB 610,402 thousand, up from RMB 399,834 thousand in the previous year[6]. - EBITDA rose by 38.63% to RMB 740,248 thousand, compared to RMB 533,956 thousand in the prior period[6]. - Net profit attributable to equity holders of the parent increased by 49.11% to RMB 458,353 thousand, up from RMB 307,399 thousand[6]. - Basic earnings per share increased by 57.14% to RMB 0.11, compared to RMB 0.07 in the previous year[6]. - The gross profit margin improved to 18.46%, up from 16.49% in the same period last year, reflecting a 1.97% increase[6]. - The net profit margin increased to 8.55%, up from 5.37%, representing a 3.18% improvement[6]. - Total comprehensive income for the period was RMB 461,221 thousand, compared to RMB 267,799 thousand in the previous year, reflecting significant growth[12]. - The operating profit for the engineering machinery sales segment was RMB 511,766 thousand, while the financial investment segment contributed RMB 50,561 thousand, leading to a total profit before tax of RMB 591,053 thousand[28]. - The company reported a pre-tax profit of RMB 132,545 for the six months ended June 30, 2024, compared to RMB 72,266 for the same period in 2023, marking an increase of approximately 83.5%[37]. Assets and Liabilities - Non-current assets totaled RMB 3,307,777 thousand as of June 30, 2024, an increase of 5.2% from RMB 3,142,659 thousand as of December 31, 2023[13]. - Current assets decreased to RMB 11,712,014 thousand, down 6.2% from RMB 12,480,883 thousand as of December 31, 2023, primarily due to a reduction in inventory[13]. - Total liabilities decreased to RMB 4,830,734 thousand, down 13.6% from RMB 5,591,403 thousand as of December 31, 2023[14]. - The company's equity increased to RMB 10,132,228 thousand as of June 30, 2024, compared to RMB 9,981,520 thousand as of December 31, 2023, reflecting a growth of 1.5%[15]. - Trade receivables rose to RMB 2,520,778 thousand, an increase of 26.3% from RMB 1,994,901 thousand as of December 31, 2023[13]. - The total amount of other payables decreased to RMB 683,765,000 from RMB 793,904,000, indicating a reduction of approximately 14%[52]. - The total liabilities as of June 30, 2024, amounted to RMB 4,090,686, a slight increase from RMB 4,090,686 as of December 31, 2023[65]. Cash Flow - Net cash flow from operating activities was RMB 316,244 thousand for the six months ended June 30, 2024, a significant decrease from RMB 918,814 thousand for the same period in 2023[21]. - Cash flow from investing activities showed a net outflow of RMB 528,162 thousand, compared to an inflow of RMB 742,576 thousand in the previous year[22]. - The net cash and cash equivalents decreased by RMB 496,092 thousand, down from an increase of RMB 1,642,075 thousand in the same period last year[22]. - The total cash and cash equivalents, including time deposits, decreased to RMB 2,979,841,000 from RMB 3,470,777,000, reflecting a decline of approximately 14%[51]. - The company’s financing activities resulted in a net cash outflow of RMB 284,174 thousand, compared to RMB 19,315 thousand in the same period last year[22]. Inventory and Receivables - Inventory turnover days decreased by 11 days to 110 days, while trade payables turnover days increased by 23 days to 157 days[6]. - Inventory decreased to RMB 2,397,703 thousand, down 16.7% from RMB 2,876,507 thousand as of December 31, 2023[13]. - The total inventory as of June 30, 2024, was RMB 2,397,703, down from RMB 2,876,507 as of December 31, 2023, indicating a decrease of about 16.7%[40]. - Trade receivables increased to RMB 3,145,337 as of June 30, 2024, compared to RMB 2,559,621 as of December 31, 2023, representing an increase of approximately 22.9%[41]. Corporate Governance and Strategy - The board of directors has maintained high standards of corporate governance and has complied with the relevant corporate governance codes, with some deviations noted[96][97][101]. - The company is focusing on reducing costs and improving operational efficiency in response to the declining revenue trends observed in the first half of 2024[59]. - The company aims to enhance its focus on the engineering machinery sector, particularly in the production of loaders, forklifts, excavators, and road machinery, while expanding overseas market channels[95]. - The company has committed to enhancing corporate governance and transparency while participating in social welfare initiatives[105]. - The company has strengthened its internal control system, focusing on procurement, supply chain management, and quality improvement[103]. Employee and Management - The total remuneration paid to key management personnel for the six months ended June 30, 2024, was RMB 8,909,000, a decrease from RMB 9,430,000 in the same period of 2023, indicating a reduction of 5.5%[60]. - The total short-term employee benefits for the six months ended June 30, 2024, was RMB 8,804,000, down from RMB 9,344,000 in the same period of 2023, representing a decline of 5.8%[60]. - The company employed approximately 6,932 employees as of June 30, 2024[114]. Market and Sales - Sales in mainland China accounted for RMB 3,892,804 thousand, while sales outside mainland China were RMB 1,467,289 thousand for the six months ended June 30, 2024[29]. - Sales of wheel loaders accounted for 40.4% of total machinery sales, generating RMB 2,160,912, while forklift sales contributed 38.4% with RMB 2,058,326, indicating a shift in product demand[32]. - Sales revenue from the forklift segment grew by 6.36% to RMB 2,058 million, accounting for 38.40% of total revenue[81]. - The sales revenue from wheel loaders contributed 40.31% of total revenue, amounting to RMB 2,161 million, a decline of 10.74% year-on-year[80]. - Excavator sales revenue decreased by 24.64% to RMB 506 million, representing 9.45% of total revenue, primarily due to reduced construction activity[82]. Other Financial Metrics - The company reported a significant increase in financial asset investment returns, amounting to RMB 304 thousand, compared to RMB 89 thousand in the previous year[22]. - Other income increased significantly by 170.10% to approximately RMB 64 million, compared to RMB 24 million in the same period of 2023, driven by the implementation of the VAT input tax credit policy for high-tech enterprises starting in the second half of 2023[91]. - Financial asset impairment losses turned positive, shifting from a loss of approximately RMB 39.6 million in the first half of 2023 to a gain of RMB 22.5 million in the same period of 2024, attributed to improved recovery of previously written-off high-risk receivables[92].

Investment Rating - Maintains a "Buy" rating with projected EPS for 2024-2026 at RMB 0.21, 0.23, and 0.26 respectively [6] Core Views - Net profit surged by 49.1% YoY to RMB 460 million in H1 2024, driven by downstream recovery and electrification of loaders [2] - Gross margin improved to 18.5%, up 2.0 percentage points YoY, while net margin rose to 8.6%, up 3.2 percentage points [2] - The company is expected to benefit from the recovery in construction machinery demand and the acceleration of loader electrification [4][5] Financial Performance - Revenue in H1 2024 was RMB 5.36 billion, down 6.4% YoY, with a significant decline in wheel loader and excavator revenues [2][3] - Forklift revenue grew by 6.4% YoY to RMB 2.06 billion, while other segments faced pressure due to industry slowdown [3] - Overseas revenue declined slightly by 1.68% YoY to RMB 1.47 billion, but its share of total sales increased to 27.4% [4] Industry and Market Outlook - The construction machinery industry is expected to stabilize and recover, supported by increased special bond issuance and improved equipment utilization [4] - The company is strategically adjusting to maintain international market share and competitiveness, with potential for overseas revenue growth [4] - The electrification of loaders is accelerating, with electric loader sales reaching 5,114 units in H1 2024, a 361.1% YoY increase, and an electrification rate of 9.0% [5] Future Growth Drivers - The company is well-positioned to benefit from the electrification trend, with a leading market share in large loaders (3 tons and above) [5] - Long-term growth is supported by stable domestic demand, policy support, and expanding export opportunities [6] Financial Projections - Revenue is projected to grow at a CAGR of 7.3% from 2024E to 2026E, reaching RMB 13.47 billion by 2026E [7] - Net profit is expected to grow at a CAGR of 13.7% from 2024E to 2026E, reaching RMB 1.13 billion by 2026E [7] - ROE is forecasted to improve from 8.4% in 2024E to 9.8% in 2026E [7]