Group 1: Export Market Outlook - The company expects continued growth in overseas markets, driven by increasing demand and improved product quality [2] - Key regions still have significant potential for growth in market share [2] - The "14th Five-Year Plan" period is anticipated to be a crucial growth phase for domestic brands in the overseas market [2] Group 2: Export Product Structure - In the first half of 2024, the export product composition is projected as follows: Earth-moving machinery 38%, Heavy machinery 26%, Mining machinery 8%, Road machinery 7%, and other engineering machinery products [3] Group 3: Profitability Expectations - The company anticipates an increase in export gross margins due to stable overseas markets and potential price increases in recognized regions [3] - Plans to optimize the product structure and enhance service capabilities to improve profitability [3] Group 4: Domestic Market Situation - Positive signs are emerging in the domestic market, particularly in earth-moving machinery, which has shown consistent recovery [3] - The company maintains an optimistic outlook on the engineering machinery industry, supported by urbanization, investment growth, and the demand for equipment renewal [3] Group 5: Mining Machinery Insights - The company ranks first domestically and among the top five globally in mining machinery, with significant revenue contributions from mining excavators (over 35%) and mining trucks (nearly 50%) [3]

Group 1: Company Overview and Product Breakdown - The company primarily engages in the research, manufacturing, sales, and service of various types of machinery, including earthmoving machinery (28% revenue, ¥139 billion), lifting machinery (20.34% revenue, ¥101 billion), concrete machinery (10.39% revenue, ¥52 billion), and aerial work machinery (9.12% revenue, ¥45 billion) [2][3]. Group 2: Domestic Market Outlook - The company observes positive signs in the domestic market, particularly in earthmoving machinery, which has shown consistent growth. The long-term outlook remains optimistic due to the government's "two-step" strategy [2][3]. Group 3: Export Market Expectations - The company anticipates continued growth in the overseas market, driven by the increasing demand for domestic brands and improvements in product quality. The international revenue for the first three quarters of 2024 accounted for 46.7% of total revenue [3][4]. Group 4: Export Product Structure - In the first half of 2024, the export product structure was as follows: earthmoving machinery (38%), lifting machinery (26%), mining machinery (8%), and road machinery (7%) [4]. Group 5: Mining Machinery Status - The company's mining machinery segment is a burgeoning industry, ranking first domestically and among the top five globally. The revenue breakdown includes mining excavators (over 35% revenue) and mining trucks (nearly 50% revenue) [4].

投资者关系活动 类别 √特定对象调研 □分析师会议 □媒体采访 □业绩说明会 □新闻发布会 □路演活动 □现场参观 □其他 （请文字说明其他活动内容） 活动参与人员 招商信诺 刘延波、易方达基金 郑涛岳、东方红 李疆、东吴证券 黄瑞 时间 2025 年 1 月 22 日 14:30-17:00 地点 一、公司 612 会议室；二、徐工矿机。 上市公司接待人 员姓名 李栋、刘敏芳 交流内容及具体 问答记录 一、互动交流 （一）外销市场预计？ 答：公司预计海外市场继续保持良好态势，海外收入依然能保持较好的增 长。首先，对国产品牌来说海外市场具有成长性特征，海外市场需求持续释放； 其次，随着国产产品品质的不断提升，国内企业在海外的渠道布局的日趋完善， 服务后市场建设的提速，国产品牌综合竞争力在提升，海外市场渗透率在提高； 再次，从在主要区域市场占比情况看，大部分产品仍有很大的提升空间；最后， 国内重点企业纷纷调整全球产能规划，落地本地化战略，加速全球化布局。总 体来说，十四五期间，国产品牌行业海外市场销量有望保持增长趋势，是工程 机械行业的重要增长点。 （二）出口产品结构？ 答：2024 年上半年，公司出口产品及占 ...

Industry Outlook - The domestic market for the construction machinery industry has shown positive signs, with earthmoving machinery achieving positive growth for several consecutive months [1] - Policies such as the trillion-yuan special treasury bond issuance and "large-scale equipment renewal" are expected to stabilize and revive the industry [1] - The industry is believed to be gradually entering the upward phase of the previous cycle [1] Long-term Strategy - The national "two-step" strategy is still in the initial stage of the second step, indicating long-term optimism for the economy and the construction machinery industry [1] International Market - The overseas market presents significant opportunities, and Chinese companies have accumulated decades of experience, positioning them well for international expansion [1] - Overseas markets are seen as a key area for future development for all Chinese brands [1]

Domestic Market Outlook - Positive signs in domestic sales, especially in earthmoving machinery, with consecutive months of positive growth [2] - Trillion-yuan bond issuance and "large-scale equipment renewal" policies expected to stabilize and revive the industry [2] - Long-term optimism due to uneven urbanization, investment growth, new energy industry development, natural equipment renewal, and growth potential in niche products [2] Overseas Market Outlook - Overseas market expected to maintain strong growth, with international revenue accounting for 46.7% in the first three quarters of 2024 [3] - Growing demand for domestic brands overseas, improved product quality, and enhanced service capabilities boosting market penetration [3] - Significant growth potential in key regional markets, with domestic companies accelerating global capacity planning and localization strategies [3] Export Regions and Strategy - Global presence in over 190 countries and regions, with key export areas including Southeast Asia, Central Asia, Africa, South America, Europe, North America, West Asia, North Africa, Central America, and Oceania [3] - Strategic focus on Latin America and Asia, while continuing to target high-end markets in Europe, America, and Australia [3] Mining Machinery Business - Mining machinery business ranks first domestically and top five globally, with key products including mining excavators (over 35% of revenue) and mining trucks (nearly 50% of revenue) [3] - Remaining revenue comes from spare parts and other related products [3]

Key Takeaways Industry and Company Overview * **Industry**: Construction machinery industry, specifically focusing on excavators and loaders. * **Companies**: Xugong Group Corporation Limited (Xugong) and Shantui Construction Machinery Co., Ltd. (Shantui). * **Market Performance**: The industry is expected to see a double-bottom formation in 2023 and 2024, with a 12% growth in the domestic market and positive growth in excavators and loaders. Core Views and Arguments * **Double-bottom Formation**: The industry is expected to see a recovery in 2023 and 2024, driven by positive growth in the domestic market and increasing demand from overseas. * **Xugong and Shantui as Gold Stocks**: Both companies are recommended as gold stocks due to their state-owned enterprise background, mixed-ownership reform, high ROE, low PB valuation, and strong cost competitiveness in overseas markets. * **Cost Competitiveness**: China's construction machinery industry has significant cost advantages, including raw material costs, supply chain integrity, and labor costs, driving its products to global markets and achieving a breakthrough in the electric vehicle field. * **Positive Outlook for 2025**: Leading companies like Xugong, Sany Heavy Industry, Shantui, and Zoomlion are optimistic about the 2025 outlook, with expected domestic market growth of 5%-10% and overseas market growth of 15%-20%. * **Alpha Potential**: Xugong and Shantui demonstrate significant alpha potential, with Xugong benefiting from mixed-ownership reform, export markets, and mining machinery, while Shantui benefits from asset injection, product innovation, and management reform. Other Important Points * **Xugong's Profit Forecast**: Xugong's profit is expected to reach 61-62 billion yuan in 2024 and 77-78 billion yuan in 2025, with a growth rate of about 25%, driven by improved asset quality, mixed-ownership reform, increased proportion of new products, and higher overseas revenue. * **Shantui's Growth Prospects**: Shantui is expected to achieve significant growth in the coming years, with its excavator business expanding and its bulldozer business expanding overseas. Leveraging the resources of Shandong Heavy Industry Group, Shantui is expected to become one of the fastest-growing sectors within the group. * **Industry Trends**: The construction machinery industry is expected to see positive trends, with domestic demand turning positive since March 2024 and overseas demand increasing. Major companies like Xugong are expected to lead the industry through mixed-ownership reform, technological innovation, and internationalization strategies. * **Xugong's Performance in Europe and the United States**: Xugong is expected to perform well in Europe and the United States in 2025, with significant reforms implemented in these regions. However, their contribution to overseas revenue is relatively low, estimated at about 10%. * **Xugong's Performance in Other Overseas Markets**: Xugong has a strong presence in South America and Africa, with a significant market share and strong competitive advantage. The Southeast Asian market is relatively competitive, but there are signs of recovery in countries like Indonesia. * **Xugong's Mining Machinery Business**: Xugong is a significant player in the mining machinery market, ranking fourth or fifth globally. The company has set a vision to achieve a revenue of 200 billion yuan by 2027 and a post-market share of 35%. * **Mixed-ownership Reform's Impact on Xugong**: Mixed-ownership reform has improved Xugong's asset quality, including significant improvement in off-balance sheet liabilities, receivables, cash flow, and debt-to-asset ratio. The company's gross profit margin is expected to increase through internal optimization and cost reduction measures. * **Xugong's Long-term Development Goals**: Xugong has set a long-term vision to achieve a revenue of over 1.5 trillion yuan and a net profit margin of 10% by 2027. The company expects a strong performance in the first quarter of 2025, driven by positive factors both domestically and internationally. * **Shantui's Development Prospects**: Shantui is expected to achieve significant growth in the coming years, with its excavator business expanding and its bulldozer business expanding overseas. Leveraging the resources of Shandong Heavy Industry Group, Shantui is expected to become one of the fastest-growing sectors within the group. * **Shantui's Sales Markets**: Shantui's main sales markets include Russia, Australia, India, Indonesia, Canada, and China. The company expects significant growth in the large-horsepower bulldozer market in the mining sector. * **Shantui's Excavator Business**: Shantui has acquired Shantui Motor, which is expected to drive the company's excavator business. The company has a comprehensive product layout, including micro, small, medium, large, and new energy excavators, with a total production capacity of 20,000 units. * **Leiwei Heavy Industry**: Leiwei Heavy Industry is a major player in the construction machinery industry, with products including excavators, loaders, wide-body dump trucks, and integrated equipment. The company is building the Weichai Qingdao Smart Heavy Industry Manufacturing Center project, which will focus on large and high-end mining equipment. * **Shantui's Export Performance**: Shantui's large-horsepower bulldozer exports have performed well, with a significant increase in export volume and value in 2023. * **Shantui's Management Changes**: Recent management changes at Shantui demonstrate the company's commitment to a new round of growth. The new management team brings experience and expertise in the industry. * **Industry Trends**: The construction machinery industry is expected to see a strong recovery, with domestic demand turning positive and overseas demand increasing. Major companies like Xugong are expected to lead the industry through mixed-ownership reform, technological innovation, and internationalization strategies. * **Shantui's Sales Markets**: Shantui's main sales markets include Russia, Australia, India, Indonesia, Canada, and China. The company expects significant growth in the large-horsepower bulldozer market in the mining sector. * **Shantui's Excavator Business**: Shantui has acquired Shantui Motor, which is expected to drive the company's excavator business. The company has a comprehensive product layout, including micro, small, medium, large, and new energy excavators, with a total production capacity of 20,000 units. * **Leiwei Heavy Industry**: Leiwei Heavy Industry is a major player in the construction machinery industry, with products including excavators, loaders, wide-body dump trucks, and integrated equipment. The company is building the Weichai Qingdao Smart Heavy Industry Manufacturing Center project, which will focus on large and high-end mining equipment. * **Shantui's Export Performance**: Shantui's large-horsepower bulldozer exports have performed well, with a significant increase in export volume and value in 2023. * **Shantui's Management Changes**: Recent management changes at Shantui demonstrate the company's commitment to a new round of growth. The new management team brings experience and expertise in the industry. * **Industry Trends**: The construction machinery industry is expected to see a strong recovery, with domestic demand turning positive and overseas demand increasing. Major companies like Xugong are expected to lead the industry through mixed-ownership reform, technological innovation, and internationalization strategies. * **Shantui's Sales Markets**: Shantui's main sales markets include Russia, Australia, India, Indonesia, Canada, and China. The company expects significant growth in the large-horsepower bulldozer market in the mining sector. * **Shantui's Excavator Business**: Shantui has acquired Shantui Motor, which is expected to drive the company's excavator business. The company has a comprehensive product layout, including micro, small, medium, large, and new energy excavators, with a total production capacity of 20,000 units. * **Leiwei Heavy Industry**: Leiwei Heavy Industry is a major player in the construction machinery industry, with products including excavators, loaders, wide-body dump trucks, and integrated equipment. The company is building the Weichai Qingdao Smart Heavy Industry Manufacturing Center project, which will focus on large and high-end mining equipment. * **Shantui's Export Performance**: Shantui's large-horsepower bulldozer exports have performed well, with a significant increase in export volume and value in 2023. * **Shantui's Management Changes**: Recent management changes at Shantui demonstrate the company's commitment to a new round of growth. The new management team brings experience and expertise in the industry. * **Industry Trends**: The construction machinery industry is expected to see a strong recovery, with domestic demand turning positive and overseas demand increasing. Major companies like Xugong are expected to lead the industry through mixed-ownership reform, technological innovation, and internationalization strategies. * **Shantui's Sales Markets**: Shantui's main sales markets include Russia, Australia, India, Indonesia, Canada, and China. The company expects significant growth in the large-horsepower bulldozer market in the mining sector. * **Shantui's Excavator Business**: Shantui has acquired Shantui Motor, which is expected to drive the company's excavator business. The company has a comprehensive product layout, including micro, small, medium, large, and new energy excavators, with a total production capacity of 20,000 units. * **Leiwei Heavy Industry**: Leiwei Heavy Industry is a major player in the construction machinery industry, with products including excavators, loaders, wide-body dump trucks, and integrated equipment. The company is building the Weichai Qingdao Smart Heavy Industry Manufacturing Center project, which will focus on large and high-end mining equipment. * **Shantui's Export Performance**: Shantui's large-horsepower bulldozer exports have performed well, with a significant increase in export volume and value in 2023. * **Shantui's Management Changes**: Recent management changes at Shantui demonstrate the company's commitment to a new round of growth. The new management team brings experience and expertise in the industry. * **Industry Trends**: The construction machinery industry is expected to see a strong recovery, with domestic demand turning positive and overseas demand increasing. Major companies like Xugong are expected to lead the industry through mixed-ownership reform, technological innovation, and internationalization strategies. * **Shantui's Sales Markets**: Shantui's main sales markets include Russia, Australia, India, Indonesia, Canada, and China. The company expects significant growth in the large-horsepower bulldozer market in the mining sector. * **Shantui's Excavator Business**: Shantui has acquired Shantui Motor, which is expected to drive the company's excavator business. The company has a comprehensive product layout, including micro, small, medium, large, and new energy excavators, with a total production capacity of 20,000 units. * **Leiwei Heavy Industry**: Leiwei Heavy Industry is a major player in the construction machinery industry, with products including excavators, loaders, wide-body dump trucks, and integrated equipment. The company is building the Weichai Qingdao Smart Heavy Industry Manufacturing Center project, which will focus on large and high-end mining equipment. * **Shantui's Export Performance**: Shantui's large-horsepower bulldozer exports have performed well, with a significant increase in export volume and value in 2023. * **Shantui's Management Changes**: Recent management changes at Shantui demonstrate the company's commitment to a new round of growth. The new management team brings experience and expertise in the industry. * **Industry Trends**: The construction machinery industry is expected to see a strong recovery, with domestic demand turning positive and overseas demand increasing. Major companies like Xugong are expected to lead the industry through mixed-ownership reform, technological innovation, and internationalization strategies. * **Shantui's Sales Markets**: Shantui's main sales markets include Russia, Australia, India, Indonesia, Canada, and China. The company expects significant growth in the large-horsepower bulldozer market in the mining sector. * **Shantui's Excavator Business**: Shantui has acquired Shantui Motor, which is expected to drive the company's excavator business. The company has a comprehensive product layout, including micro, small, medium, large, and new energy excavators, with a total production capacity of 20,000 units. * **Leiwei Heavy Industry**: Leiwei Heavy Industry is a major player in the construction machinery industry, with products including excavators, loaders, wide-body dump trucks, and integrated equipment. The company is building the Weichai Qingdao Smart Heavy Industry Manufacturing Center project, which will focus on large and high-end mining equipment. * **Shantui's Export Performance**: Shantui's large-horsepower bulldozer exports have performed well, with a significant increase in export volume and value in 2023. * **Shantui's Management Changes**: Recent management changes at Shantui demonstrate the company's commitment to a new round of growth. The new management team brings experience and expertise in the industry. * **Industry Trends**: The construction machinery industry is expected to see a strong recovery, with domestic demand turning positive and overseas demand increasing. Major companies like Xugong are expected to lead the industry through mixed-ownership reform, technological innovation, and internationalization strategies. * **Shantui's Sales Markets**: Shantui's main sales markets include Russia, Australia, India, Indonesia, Canada, and China. The company expects significant growth in the large-horsepower bulldozer market in the mining sector. * **Shantui's Excavator Business**: Shantui has acquired Shantui Motor, which is expected to drive the company's excavator business. The company has a comprehensive product layout, including micro, small, medium, large, and new energy excavators, with a total production capacity of 20,000 units. * **Leiwei Heavy Industry**: Leiwei Heavy Industry is a major player in the construction machinery industry, with products including excavators, loaders, wide-body dump trucks, and integrated equipment. The company is building the Weichai Qingdao Smart Heavy Industry Manufacturing Center project, which will focus on large and high-end mining equipment. * **Shantui's Export Performance**: Shantui's large-horsepower bulldozer exports have performed well, with a significant increase in export volume and value in 2023. * **Shantui's Management Changes**: Recent management changes at Shantui demonstrate the company's commitment to a new round of growth. The new management team brings experience and expertise in the industry. * **Industry Trends**: The construction machinery industry is expected to see a strong recovery, with domestic demand turning positive and overseas demand increasing. Major companies like Xugong are expected to lead the industry through mixed-ownership reform, technological innovation, and internationalization strategies. * **Shantui's Sales Markets**: Shantui's main sales markets include Russia, Australia, India, Indonesia, Canada, and China. The company expects significant growth in the large-horsepower bulldozer market in the mining sector. * **Shantui's Excavator Business**: Shantui has acquired Shantui Motor, which is expected to drive the company's excavator business. The company has a comprehensive product layout, including micro, small, medium, large, and new energy excavators, with a total production capacity of 20,000 units. * **Leiwei Heavy Industry**: Leiwei Heavy Industry is a major player in the construction machinery industry, with products including excavators, loaders, wide-body dump trucks, and integrated equipment. The company is building the Weichai Qingdao Smart Heavy Industry Manufacturing Center project, which will focus on large and high-end mining equipment. * **Shantui's Export Performance**: Shantui's large-horsepower bulldozer exports have performed well, with a significant increase in export volume and value in 2023. * **Shantui's Management Changes**: Recent management changes at Shantui demonstrate the company's commitment to a new round of growth. The new management team brings experience and expertise in the industry. * **Industry Trends**: The construction machinery industry is expected to see a strong recovery, with domestic demand turning positive and overseas demand increasing. Major companies like Xugong are expected to lead the industry through mixed-ownership reform, technological innovation, and internationalization strategies. * **Shantui's Sales Markets**: Shantui's main sales markets include Russia, Australia, India, Indonesia, Canada, and China. The company expects significant growth in the large-horsepower bulldozer market in the mining sector. * **Shantui's Excavator Business**: Shantui has acquired Shantui Motor, which is expected to drive the company's excavator business. The company has a comprehensive product layout, including micro, small, medium, large, and new energy excavators, with a total production capacity of 20,000 units. * **Leiwei Heavy Industry**: Leiwei Heavy Industry is a major player in the construction machinery industry, with products including excavators, loaders, wide-body dump trucks, and integrated equipment. The company is building the Weichai Qingdao Smart Heavy Industry Manufacturing Center project, which will focus on large and high-end mining equipment. * **Shantui's Export Performance**: Shantui's large-horsepower bulldozer exports have performed well, with a significant increase in export volume and value in 2023. * **Shantui's Management Changes**: Recent management changes at Shantui demonstrate the company's commitment to a new round of growth. The new management team brings experience and expertise in the industry. * **Industry Trends**: The construction machinery industry is expected to see a strong recovery, with domestic demand turning positive and overseas demand increasing. Major companies like Xugong are expected to lead the industry through mixed-ownership reform, technological innovation, and internationalization strategies. * **Shantui's Sales Markets**: Shantui's main sales markets include Russia, Australia, India, Indonesia, Canada, and China. The company expects significant growth in the large-horsepower bulldozer market in the mining sector. * **Shantui's Excavator Business**: Shantui has acquired Shantui Motor, which is expected to drive the company's excavator business. The company has a comprehensive product layout, including micro, small, medium, large, and new energy excavators, with a total production capacity of 20,000 units. * **Leiwei Heavy Industry**: Leiwei Heavy Industry is a major player in the construction machinery industry, with products including excavators, loaders, wide-body dump trucks, and integrated equipment. The company is building the Weichai Qingdao Smart Heavy Industry Manufacturing Center project, which will focus on large and high-end mining equipment. * **Shantui's Export Performance**: Shantui's large-horsepower bulldozer exports have performed well, with a significant increase in export volume and value in 2023. * **Shantui's Management Changes**: Recent management changes at Shantui demonstrate the company's commitment to a new round of growth. The new management team brings experience and expertise in the industry. * **Industry Trends**: The construction machinery industry is expected to see a strong recovery, with domestic demand turning positive and overseas demand increasing. Major companies like Xugong are expected to lead the industry through mixed-ownership reform, technological innovation, and international

Investment Rating - The report assigns a **Buy** rating to XCMG with a 12-month target price of RMB 8.40, representing a potential upside of 12.8% from the current price of RMB 7.45 [4][5][8] Core Views - XCMG is expected to achieve **high single-digit revenue growth** in 2025, with domestic revenue growing at a single-digit rate and overseas revenue maintaining double-digit growth [1] - The company anticipates **improved profitability** in 2025 due to better revenue mix and cost control, leading to a year-on-year increase in net profit margin [1] - XCMG plans to continue reducing off-balance sheet receivables in 2025, indicating a focus on financial health [1] - Overseas inventory levels are reported to be healthy, with an average of around **1 month of inventory** [1] Domestic Market Outlook - Domestic excavator sales are expected to grow at a **double-digit rate** in 2025, driven by infrastructure projects and improved operating hours [2] - Small excavator sales are projected to maintain strong growth, while medium excavator sales are expected to improve [2] - However, demand for concrete machinery, cranes, and aerial work platforms is expected to remain weak in 2025 [2] Overseas Market Outlook - Overseas revenue is forecasted to grow at a **double-digit rate** in 2025, following a similar performance in 2024 [3] - The fastest growth is expected in **Europe, America, and Australia**, primarily due to a low base effect [3] - Asia, particularly Indonesia, is also expected to contribute to strong growth, while Latin America may see a slowdown but still achieve double-digit growth [3] - Mining machinery and aerial work platforms are likely to experience robust growth, with mining machinery benefiting from increased market share due to competitive pricing [3] Financial Metrics - The company's valuation is based on a **12.0x 2025E PE ratio**, with a target price of RMB 8.40 [4] - XCMG's market capitalization is RMB 88.0 billion (USD 12.0 billion), with a P/B ratio of 1.5x and net debt/EBITDA of 0.5x as of 12/24E [5] - The company's EBIT margin is expected to improve from 7.6% in 2021 to 12.9% by 2028E, reflecting stronger profitability [7] Company Background - XCMG is a leading brand in China's construction machinery industry, specializing in products such as cranes, earthmoving machinery, and road construction equipment [9] - The company holds the **top market share** in domestic sales of truck cranes and truck-mounted cranes and is one of the largest exporters of construction machinery in China [9]

Summary of Conference Call Records Industry Overview - The conference call primarily discusses the **engineering machinery industry** in China, focusing on the performance and outlook of major companies like **Xugong** and **Sany** [1][2][3][4][5][6][7][8][9][10][11][12][13][14][15][16][17][18][19][20][21][22][23][24][25][26][27][28][29][30][31][32][33][34][35][36][37][38][39][40]. Key Points and Arguments 1. **Market Growth**: The engineering machinery industry is entering a turning point, with both domestic and overseas markets expected to show positive growth. Domestic demand is stabilizing, while overseas demand is projected to increase [1][2][3][4][5][6][7][8][9][10][11][12][13][14][15][16][17][18][19][20][21][22][23][24][25][26][27][28][29][30][31][32][33][34][35][36][37][38][39][40]. 2. **Company Performance**: Major companies like **Xugong** and **Sany** are expected to achieve revenue growth of 5% to 10% domestically by 2025, with some companies projecting even higher growth rates [6][7][8][9][10][11][12][13][14][15][16][17][18][19][20][21][22][23][24][25][26][27][28][29][30][31][32][33][34][35][36][37][38][39][40]. 3. **Valuation and Investment Opportunities**: The companies discussed are considered undervalued with high growth potential. For instance, **Sany** is projected to have a PE ratio of around 10x by 2025, indicating significant upside potential [7][8][9][10][11][12][13][14][15][16][17][18][19][20][21][22][23][24][25][26][27][28][29][30][31][32][33][34][35][36][37][38][39][40]. 4. **Export Growth**: The export market for engineering machinery is expected to grow significantly, particularly in regions like Africa and South America, with projected growth rates of 30% and 25% respectively [30][31][32][33][34][35][36][37][38][39][40]. 5. **Technological Advancements**: Companies are leveraging technological advancements, particularly in electric machinery, to enhance their global competitiveness. The electric machinery segment is seen as a key growth area [4][5][6][7][8][9][10][11][12][13][14][15][16][17][18][19][20][21][22][23][24][25][26][27][28][29][30][31][32][33][34][35][36][37][38][39][40]. 6. **Cost Management**: Companies are focusing on cost control measures, including procurement efficiencies and design improvements, to enhance profitability. For example, **Sany** has achieved significant cost savings through these initiatives [19][20][21][22][23][24][25][26][27][28][29][30][31][32][33][34][35][36][37][38][39][40]. 7. **Market Positioning**: **Sany** and **Xugong** are positioned as leaders in the market, with strong brand recognition and a comprehensive product portfolio that includes excavators, loaders, and bulldozers [23][24][25][26][27][28][29][30][31][32][33][34][35][36][37][38][39][40]. 8. **Future Outlook**: The overall sentiment is optimistic, with expectations of continued growth in both domestic and international markets, driven by infrastructure investments and a recovering global economy [29][30][31][32][33][34][35][36][37][38][39][40]. Other Important but Overlooked Content - The call highlighted the importance of **corporate governance** and management reforms in driving company performance and improving investor confidence [20][21][22][23][24][25][26][27][28][29][30][31][32][33][34][35][36][37][38][39][40]. - There was a discussion on the **competitive landscape**, noting that while the market is dominated by a few key players, there is still room for growth and innovation, particularly in niche segments [31][32][33][34][35][36][37][38][39][40]. This summary encapsulates the key insights and projections from the conference call, providing a comprehensive overview of the engineering machinery industry's current state and future potential.

Investment Rating - The report maintains a "Buy" rating for XCMG (000425) with a target PE of 14, 11, and 9 for 2024-2026 respectively [7] Core Views - XCMG is transitioning towards becoming a global leader in construction machinery, with mixed-ownership reform benefits driving performance release and asset quality improvement, leading to potential value re-rating [2] - The construction machinery industry is expected to see a recovery in both domestic and overseas demand, with domestic demand bottoming out and overseas markets showing signs of improvement [2] - XCMG's profitability is strong, with a ROE of 9% in 2024Q3, ranking among the top five manufacturers in China [3] - The company's overseas business is accelerating, with international revenue accounting for 47% of total revenue in the first three quarters of 2024, up from 13% in 2019 [5] Industry Analysis Domestic Market - The domestic excavator market is expected to grow by 12% in 2025, driven by equipment renewal cycles and increased market concentration, with CR4 rising to 68.4% in 2023 [2] - Domestic excavator sales increased by 12% YoY in 2024, with December sales up 22% YoY, marking 10 consecutive months of positive growth [40] Overseas Market - Overseas excavator sales showed signs of recovery, with December 2024 exports up 11% YoY, marking five consecutive months of positive growth [43] - The "Belt and Road" countries accounted for 73% of China's excavator export value from January to November 2024, indicating strong demand from these regions [48] Company Analysis Financial Performance - XCMG's revenue is expected to grow from 90.9 billion yuan in 2024 to 127.9 billion yuan in 2026, with net profit growing from 6.2 billion yuan to 9.7 billion yuan over the same period [7] - The company's ROE is projected to increase from 9% in 2023 to 13% in 2026, reflecting improved profitability and asset quality [7] Business Segments - XCMG's mining machinery segment has shown strong growth, with revenue increasing from 1.35 billion yuan in 2019 to 5.86 billion yuan in 2023, a CAGR of 44% [5] - The company's crane business remains a market leader, with a 40.37% market share in the global truck crane market in 2021 [67] Competitive Advantages - XCMG ranks fourth globally in the construction machinery market with a 5.3% market share in 2024, trailing only Caterpillar, Komatsu, and John Deere [3] - The company has a comprehensive product portfolio, with multiple products ranking first in the domestic market, including cranes, excavators, and road machinery [35] Strategic Initiatives - XCMG has implemented a global investor return plan, focusing on improving profitability, cash flow, and asset quality, with a commitment to distribute at least 40% of annual distributable profits as dividends or share buybacks from 2025 to 2027 [102] - The company has secured several large international mining equipment contracts, including an 800 million yuan deal with Simfer for the Simandou iron ore project in Guinea [98]

Market Outlook - Domestic market shows positive signs with continuous growth in earthmoving machinery [2] - National policies like trillion-yuan bond issuance and "large-scale equipment renewal" are expected to stabilize and revive the industry [2] - Long-term optimism due to urbanization, investment growth, new energy industry development, natural equipment renewal, and growth potential in niche products [2] - Overseas market is vast, with Chinese brands well-positioned for expansion [2] Market Share - 17 types of machinery, including truck cranes and road rollers, rank first domestically [3] - Global leadership in lifting machinery, mobile cranes, and horizontal directional drills [3] - Strong global positions in pile machinery, concrete machinery, road machinery, and tower cranes [3] - High rankings in mining equipment, excavators, and loaders globally [3] Revenue Breakdown - Lifting machinery accounts for 20.34% of total revenue [3] - Earthmoving machinery contributes 28.02% [3] - Concrete machinery makes up 10.39% [3] - Aerial work platforms account for 9.12% [3] - Mining machinery represents 7.13% [3] - Road machinery contributes 5.49% [3] - Other engineering machinery accounts for 19.51% [3] Overseas Market - Overseas revenue accounted for 46.7% in the first three quarters of 2024 [4] - Key export regions include Southeast Asia, Central Asia, Africa, South America, Europe, North America, and Oceania [4] - Export product structure: earthmoving machinery 38%, lifting machinery 26%, mining machinery 8%, road machinery 7%, and other engineering machinery [4] - Overseas market growth driven by increasing demand, improved product quality, and enhanced service capabilities [3] Global Presence - Marketing network covers over 190 countries and regions [4] - Comprehensive product marketing services and full-value chain solutions provided globally [4]