Investment Rating - The investment rating for the company is "Buy" [3] Core Views - The company plans to acquire 51% of Xuzhou Xugong Heavy Vehicles for 820 million RMB, aiming to become a global leader in open-pit mining machinery [1] - The acquisition will enhance the company's competitive advantage in mining machinery by integrating a complete range of products, providing a one-stop service for global mining customers [1] - The company has been ranked among the top five global manufacturers of open-pit mining equipment for six consecutive years, achieving a revenue of 5.9 billion RMB in 2023 with a CAGR of 44% from 2019 to 2023 [2] - The company has secured significant international contracts, including a nearly 800 million RMB contract for core mining equipment for the Simfer project in Guinea [2] - The company expects revenue growth from 2024 to 2026, with projected revenues of 909 billion, 1,047 billion, and 1,279 billion RMB, respectively [3] Summary by Sections Acquisition Details - The company announced an acquisition of 51% of Xuzhou Xugong Heavy Vehicles for 820 million RMB, which will be consolidated into its financial statements [1][10] - The seller, Xugong Nanjing, is a wholly-owned subsidiary of Xugong Group, focusing on vehicle design, production, and sales [1] Performance Commitments - Xugong Nanjing has committed to a net profit of no less than 1.44 billion, 1.61 billion, and 1.81 billion RMB for the years 2025 to 2027, totaling at least 4.86 billion RMB [2][10] Market Position and Growth - The company ranked fourth among global open-pit mining equipment manufacturers in 2024, being the only Chinese company in the top five [2] - The mining machinery revenue accounted for 7.1% of total revenue in the first half of 2024, with a gross margin of 24% [2] Revenue and Profit Forecast - The company forecasts revenues of 909 billion, 1,047 billion, and 1,279 billion RMB for 2024, 2025, and 2026, respectively, with year-on-year growth rates of -2%, 15%, and 22% [3] - The projected net profit for the same years is 62 billion, 78 billion, and 97 billion RMB, with growth rates of 16%, 26%, and 25% [3]