Group 1 - The company expects an upward trend in operating performance for the period from January 1, 2025, to June 30, 2025 [1] - The main reasons for the change in net profit attributable to shareholders and net profit after deducting non-recurring gains and losses include a recovery in the domestic market driven by economic stabilization policies, product upgrades, and accelerated growth in the earth-moving machinery industry [1] - The company's main products, including loaders, excavators, and road machinery, have achieved rapid growth due to the favorable market conditions [1] Group 2 - The international market is currently in a demand bottoming phase, presenting challenges for the company [1] - The company is implementing a "three-full" strategy focusing on comprehensive solutions, full automation, and full internationalization to address market competition and environmental challenges [1] - Both domestic and international business revenues and profits have shown stable growth as a result of the company's innovative practices and strategic upgrades [1]

Performance Forecast - The company expects a net profit attributable to shareholders of the listed company to be between 118,023.71 million yuan and 127,859.02 million yuan, representing a growth of 20% to 30% compared to the previous year, which was 98,353.09 million yuan [1] - The net profit after deducting non-recurring gains and losses is projected to be between 109,003.44 million yuan and 118,838.75 million yuan, with a growth of 21% to 32% compared to the previous year's 90,260.84 million yuan [1] - Basic earnings per share are expected to be between 0.5845 yuan/share and 0.6332 yuan/share, compared to 0.5041 yuan/share in the previous year [1] Reasons for Performance Change - The domestic market is experiencing a recovery due to ongoing economic stabilization policies, increased demand for product upgrades, and accelerated transition to new energy, leading to significant growth in the company's main products such as loaders, excavators, and road machinery [1] - The international market is currently in a demand bottoming phase, but the company is addressing challenges through its "Three Full" strategy, which focuses on comprehensive solutions, full automation, and full internationalization, resulting in stable growth in both domestic and international business revenues and profits [1]

Summary of the Conference Call for Liugong Company Overview - **Company**: Liugong - **Industry**: Construction Machinery Key Points Leadership Transition - Liugong successfully transitioned its management, with Luo Guobin appointed as the new president, while Zeng Guang'an became a senior advisor to guide strategic planning and ensure a smooth leadership transition [2][4][5] Strategic Goals - The company's 14th Five-Year Plan (2023-2027) aims for a revenue target of 50 billion RMB, with a more challenging 15th Five-Year Plan targeting 10 billion USD by 2032 and maintaining a net profit margin of 8%-9% [2][7] Incentive Mechanisms - Liugong is implementing long-term incentive mechanisms such as stock options and cash stock to break the "big pot" phenomenon, ensuring strict KPI assessments for executives to promote continuous innovation [2][9] Industry Growth Projections - The domestic construction machinery industry is expected to experience moderate growth by 2027-2028, with earthmoving machinery sales projected at 270,000 to 280,000 units, benefiting Liugong due to its high market share in this segment [2][11] International Business Performance - Liugong's international business showed double-digit growth from January to May 2025, with an average monthly increase of several percentage points, aligning with expectations [2][12] Aftermarket Business Focus - The company emphasizes its aftermarket business, drawing lessons from Caterpillar, and plans to enhance customer satisfaction by requiring dealers to use Liugong parts [2][16][17] Cost Control and Profitability Goals - Liugong aims to improve its net profit margin by 1% to 5% by 2025 and targets 8%-9% by 2030 through cost control measures including product development and supply chain management [3][25] Market Expansion Plans - Future international market expansion will focus on Europe and North America, with an emphasis on second-hand machinery exports [2][13] Regional Market Performance - In 2025, the overseas market performance varied, with developed regions like North America and Europe experiencing declines, while developing countries showed growth [14] Collaboration with Group Company - The group company plans to enhance collaboration with the listed company through market value management and capital operations, aiming for resource sharing and improved operational efficiency [10][18] Shareholder Returns - Liugong anticipates a stable development trend with a compound annual profit growth rate of 35%-50%, while also focusing on enhancing shareholder returns [30] Future Product Development - The company plans to accelerate the launch of large and ultra-large mining equipment, with a target of 2 billion RMB in mining business revenue for 2025 and aims to exceed 10 billion RMB in the future [28][29] Demand for Small Excavators - There is a significant increase in demand for small excavators, particularly in agriculture and water conservancy projects, driven by government investments [26] Age Policy for Leadership - Liugong's flexible age policy for leadership does not enforce mandatory retirement, allowing experienced leaders to remain in their roles based on capability and health [27] Electric Loader Demand - The demand for electric loaders is rising, with over 40% penetration, while excavators lag in electrification, affecting their demand dynamics [23][24] This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting Liugong's focus on leadership, growth strategies, and market dynamics in the construction machinery industry.

Core Viewpoint - The company is focused on maintaining stability in its board and management while pursuing growth through a comprehensive internationalization and intelligent solutions strategy, alongside a new "15-5" strategic plan aimed at enhancing its market position and operational efficiency [2][3]. Group 1: Company Strategy and Governance - The new board and management will continue to implement the company's budget goals and strategic initiatives, emphasizing internationalization and intelligent solutions [2]. - The company plans to deepen its market-oriented mechanisms and internal governance, supported by the actual controller and major shareholder, to enhance operational flexibility and innovation [2]. Group 2: Industry Trends and Demand - The excavator market is transitioning to a rational growth phase, with domestic demand expected to remain stable despite a slowdown in the real estate sector, driven by government initiatives in urban renewal and infrastructure projects [3]. - The loader industry has seen a sudden increase in domestic sales due to accelerated investments in agriculture and infrastructure, with demand expected to remain steady [4]. Group 3: Competitive Landscape - The company is facing intense price competition in the electric loader segment but is committed to sustainable practices and enhancing customer experience through value-added services [5]. - The company is focusing on building a competitive advantage through smart manufacturing and high self-manufacturing rates of components [5]. Group 4: International Business Performance - The company's overseas business has shown steady growth despite a global market slowdown, with a focus on emerging markets and ongoing expansion in developed regions [6]. - The long-term goal is to establish the company as a trusted global brand with high-value products and services [6]. Group 5: Financial Performance - In Q1 2025, the company reported a revenue of 9.149 billion yuan, a year-on-year increase of 15.24%, and a net profit of 657 million yuan, up 32.0% year-on-year [7]. - The company's gross margin stands at 22.01%, indicating improved profitability [7]. Group 6: Market Outlook - The company anticipates a stable positive growth in domestic earthmoving equipment demand for the second half of the year, with expectations of maintaining a double-digit growth rate for the full year [3].

Governance and Management - The new board structure is stable, maintaining the company's governance mechanisms without changes, emphasizing standardized management and market-oriented decision-making [2][3] - The annual performance targets remain unchanged, with strategic goals for 2027 being progressively advanced [2][3] - The new management team is a blend of experienced and energetic members, fostering a collaborative and cohesive environment [3] Strategic Development - The company is committed to a strategy of "comprehensive internationalization, comprehensive intelligence, and comprehensive solutions," aiming for business growth and quality improvement [4] - The "15-5" strategic plan is being developed to enhance growth across various sectors, including engineering machinery and emerging markets [4] - The company plans to leverage measures such as performance growth, share buybacks, and high cash dividends to enhance investor returns [3] Market Performance and Trends - The domestic excavator sales have outpaced industry growth, with an expected double-digit growth rate for the year [7] - The demand for loaders has surged due to increased investment in agricultural water conservancy projects and major infrastructure [8] - Despite a slowdown in the real estate market, demand is anticipated to stabilize due to government initiatives in urban renewal and infrastructure projects [7] International Business Outlook - The overseas business has shown steady growth, particularly in emerging markets, despite a general decline in global demand [10] - The company aims to enhance its position in emerging regions while expanding its operations in Europe and North America [10] Mining Equipment Development - The company offers a comprehensive range of mining products and plans to focus on large and super-large tonnage equipment, as well as smart and green mining solutions [12] - Future strategies include global development and targeted customer engagement in both domestic and international markets [12]

Group 1: Industry Outlook and Performance Expectations - The domestic engineering machinery market is expected to enter a new upward cycle in 2025, driven by natural equipment updates and favorable policies, with a projected revenue of CNY 34.6 billion and an increase in net profit margin by over 1 percentage point [3] - Overseas demand is anticipated to continue declining but at a slower rate, with emerging markets maintaining moderate to high growth [3] Group 2: Financial Performance and Margins - The company's gross margin decreased in Q4 2024 due to new accounting standards, but it is expected to improve under previous accounting policies [3] - The company achieved a 20% increase in overseas revenue in 2024, outperforming the industry by 22 percentage points [3] Group 3: Strategic Development and Market Position - The company has a comprehensive mining equipment matrix and plans to launch a 200-ton mining excavator in H1 2025, with a focus on internationalization and intelligent solutions [6] - The company maintains a leading market share in electric loaders, with a projected 500% increase in overseas sales in 2024 [4] Group 4: Cost Management and Profitability - A strategic cost control system will be established to enhance profitability, focusing on R&D, procurement, and manufacturing [7] - The company aims to maintain a dividend payout ratio of over 40%, with a 2023 dividend rate of 45% [8] Group 5: Risk Management and Asset Quality - In 2024, credit and asset impairment losses were CNY 579 million, accounting for 2% of revenue, showing significant improvement from 2023 [9] - The company plans to enhance risk management and optimize asset quality as key operational goals for 2025 [9]

Group 1: Industry Outlook and Performance Expectations - The domestic engineering machinery market is expected to see a significant increase in demand in 2025, with a projected revenue of CNY 34.6 billion and a net profit margin improvement of over 1% [3] - Overseas demand is anticipated to continue declining, but at a reduced rate, with emerging markets maintaining moderate to high growth [3] Group 2: Financial Performance and Margins - The company's gross margin decreased in Q4 2024 due to new accounting standards, but the gross margin is expected to improve under previous accounting policies [3] - The company achieved a 20% revenue growth in overseas markets, with emerging markets seeing a 30% increase [4] Group 3: Strategic Development and Product Lines - The company plans to launch a 200-ton mining excavator in H1 2025 and has developed a comprehensive mining equipment matrix [6] - The company aims to enhance its electric loader's gross margin and expects a 500% increase in overseas sales of electric loaders in 2024 [4] Group 4: Cost Management and Profitability - A strategic cost control system will be established to lower operational costs, focusing on R&D, procurement, and manufacturing [7] - The company aims to maintain a dividend payout ratio of over 40%, with a 2023 dividend rate of 45% [8] Group 5: Risk Management and Asset Quality - In 2024, the company reported credit and asset impairment losses of CNY 579 million, accounting for 2% of revenue, with a significant improvement from 2023 [9] - The company plans to enhance risk management and optimize asset quality as key operational goals for 2025 [9]