XCMG(SZ:000425) Soochow Securities·2026-02-27 11:11Investment Rating - The report assigns a "Buy" rating for XCMG Machinery (徐工机械) as a first coverage [1]. Core Views - XCMG Machinery is recognized as a leading player in the Chinese construction machinery industry, leveraging mixed ownership reform, globalization, and diversification to drive performance growth [7][13]. - The company has successfully transitioned from a local state-owned enterprise to a globally competitive modern listed company, maintaining a leading position in traditional sectors while expanding into emerging strategic areas such as aerial work machinery and mining machinery [7][13]. - The report highlights the expected recovery in both domestic and international markets, with a focus on the resurgence of overseas industry demand [7][43]. - Mining machinery is identified as a second growth curve for the company, with advancements in electrification and globalization creating competitive advantages [7][43]. Summary by Sections 1. Company Overview - XCMG Machinery has evolved into a global leader in the construction machinery sector, with a comprehensive product range including cranes, earth-moving machinery, and concrete machinery [13][15]. - The company has a clear ownership structure that combines state control with market-driven mechanisms, enhancing operational vitality [29]. 2. Market Dynamics - The construction machinery industry is entering a new cycle, with exports becoming a core growth driver, expected to account for 50% of total sales by 2025 [43][47]. - Domestic excavator demand is projected to grow significantly, with an expected average annual increase of over 20% from 2025 to 2028 [7][50]. 3. Financial Performance - The report forecasts XCMG's total revenue to reach 134.84 billion yuan by 2027, with a compound annual growth rate (CAGR) of approximately 13.64% from 2025 to 2027 [1]. - The net profit attributable to shareholders is expected to grow from 70 billion yuan in 2025 to 119 billion yuan in 2027, reflecting strong earnings potential [1]. 4. Competitive Advantages - XCMG's mining machinery segment is positioned as a new growth point, with a focus on high-margin aftermarket services and a complete solution approach [7][43]. - The company is advancing in electrification, achieving a closed-loop supply chain for battery systems, which enhances its market penetration in new energy products [7][43].