Q4 and full year 2025 earnings presentation Making Life Better Forward-looking statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to expectations of Ingersoll Rand Inc. (the "Company" or "Ingersoll Rand") regarding the performance of its business, its financial results, its liquidity and capital resources and other non-historical statements. These forward-looking statements generally are ...

Group 1: Growth Trends - The "first growth curve" driven by the "numerator" is recognized, with a shift from infrastructure to manufacturing exports expected in 2025[4] - China's overseas investment demand is still on a high growth trajectory, with a three-year rapid growth cycle observed in capital goods exports[4] - In 2025, direct investment in countries along the Belt and Road Initiative (BRI) is projected to increase significantly, particularly in Asia and Africa[4] Group 2: Risks and Challenges - Geopolitical risks, particularly from Western countries, are increasingly impacting overseas investment decisions, exemplified by the U.S. "long-arm jurisdiction" policies[4] - Emerging economies face challenges related to economic stability and high debt levels, with African nations experiencing a shift from concessional loans to higher-cost commercial loans[4] - High inflation rates in regions like Africa, averaging 18.6% in 2024, pose risks to profit margins for companies operating abroad[4] Group 3: Strategic Responses - The Chinese government aims to enhance cooperation with BRI countries and improve risk management in overseas investments as outlined in the 14th Five-Year Plan[4] - Development of international financial infrastructure, such as the Hong Kong Gold Exchange, is seen as a key lever to mitigate risks associated with overseas investments[4] - The establishment of a gold central clearing system in Hong Kong is expected to facilitate RMB-denominated gold transactions, enhancing financial stability for emerging economies[4]

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **excavator industry** in China and its performance in both domestic and overseas markets, particularly looking ahead to **2026** [1][5][12]. Core Insights and Arguments - **Domestic Excavator Sales**: By the end of 2023, domestic excavator sales exceeded expectations with an actual growth rate of nearly **20%**. This surge is attributed to year-end rush work, improved funding availability, and inventory pressure from certain manufacturers [1][2][3]. - **Overseas Market Performance**: The overseas market also showed strong demand, with actual growth close to **20%**, surpassing initial forecasts of around **10%**. This was driven by similar factors as the domestic market [2][3]. - **Future Sales Projections**: For **2026**, domestic excavator sales are expected to continue growing, with small excavators projected to increase by **15%-20%** and medium to large excavators expected to achieve over **10%** growth, supported by central government special bonds for water conservancy projects [5][12]. - **International Market Dynamics**: The overseas market is anticipated to benefit from the U.S. interest rate cut cycle, which is expected to enhance economic activity. Regions like Africa, South America, and the Middle East are expected to see increased demand for mining equipment due to rich mineral resources and a favorable exchange rate for the dollar [6][8]. Additional Important Insights - **Market Share of Chinese Brands**: In 2024, major Chinese engineering machinery companies are projected to hold a market share of approximately **17%** in key categories like excavators and loaders. The new excavator market share is estimated to be between **25%-30%**, although revenue share is lower due to lower pricing compared to Western brands [3][9]. - **Impact of Used Equipment**: The used equipment market significantly influences the new machine market, especially in Africa where used machines account for **70%** of actual demand. This dynamic suggests that the real market share for new machines in Africa may only be around **10%** [10][11]. - **Competitive Landscape**: The competition among Chinese brands can be assessed by tracking the gross margin changes of second-tier brands like LiuGong, which have seen margins rise from **27%-28%** to **33%-34%** by Q3 2025. This indicates a competitive environment that could impact market share [11]. - **Valuation of Companies**: The engineering machinery sector is currently undervalued, with companies like SANY Heavy Industry trading at around **16 times** earnings, while others like LiuGong and XCMG are around **12 times**. This presents a significant investment opportunity given the expected market rebound [12][14]. Recommendations - **Investment Recommendations**: The preferred investment order includes SANY Heavy Industry and XCMG due to their high elasticity in an upward cycle. LiuGong and Zoomlion are also recommended, with specific attributes appealing to different investor strategies [14].

Core Viewpoint - Taiyuan Heavy Industry has been involved in financial fraud for over seven years, with underlying issues stemming from external auditors' negligence and internal governance failures [1] Group 1: Financial Fraud Details - The company was fined for financial fraud occurring between 2014-2018 and 2020-2021, with a total penalty of 16.95 million yuan, including lifetime market bans for key executives [1][2] - Fraudulent practices included premature revenue recognition and inflated project income, particularly in the 300MW wind power project in Heilongjiang [2][3] - In 2014, the company overstated revenue by 757 million yuan, representing 8.39% of reported revenue, and inflated profit by 155 million yuan, which was 763.89% of the reported profit [3] Group 2: Company Performance and Debt Issues - The company's revenue growth has been struggling since 2011, with significant declines in core business segments starting in 2014 [5][6] - High debt levels have been a persistent issue, with liabilities exceeding 80% of assets since 2014, peaking over 90% [8][10] - The company has relied heavily on external financing, with interest-bearing debt surpassing 10 billion yuan in recent years, leading to financial costs exceeding profits [10][12] Group 3: Governance and Internal Control Failures - External auditors, specifically Deloitte, failed to detect the fraud over seven years, raising questions about their accountability [13][15] - Internal governance issues are evident, with key executives being aware of the fraudulent activities yet failing to act [16] - Corruption among management, particularly involving the former general manager, has led to significant losses of state assets [17][18]

Core Viewpoint - Taiyuan Heavy Industry has received an administrative penalty notice from the Shanxi Securities Regulatory Bureau, leading to a risk warning for its stock, which will be renamed to "ST Tai Heavy" starting November 4, 2023 [1] Group 1: Company Overview - Taiyuan Heavy Industry, established in 1998, is a key state-owned enterprise in China, originally founded as the Taiyuan Heavy Machinery Plant in 1950, and is recognized as the first heavy machinery manufacturing enterprise designed and built independently in New China [2] - The company specializes in various equipment including rail transit, mining, lifting, rolling, coking, engineering machinery, gear transmission, and casting, serving industries such as metallurgy, mining, energy, transportation, aerospace, and environmental protection [2] - Since 2020, the company has undergone significant management changes and has initiated a strategy to divest underperforming assets and transform its operations, aiming for survival, recovery, and rebirth within five years [2] Group 2: Financial Performance - In the third quarter of 2025, Taiyuan Heavy Industry reported a revenue of 7.028 billion yuan, a year-on-year increase of 9.98%, driven by growth in bulk product sales and improved gross margins [3] - Research and development expenses rose by 26.4% to 357 million yuan, indicating ongoing investment in technology upgrades and product optimization [3] - The net profit attributable to shareholders reached 85.0635 million yuan, a year-on-year increase of 21.80%, while total profit grew by 4.83% to 199 million yuan [3] - The net cash flow from operating activities was 534 million yuan, up 34.41%, reflecting improved management of accounts receivable and sales collection efficiency [3] Group 3: Industry Outlook - The heavy machinery sector is recognized as a strategic emerging industry in China, with national policies promoting equipment upgrades and green transformation, leading to an expected steady improvement in industry capacity and market structure [4] - The company is focused on new industrialization, deepening state-owned enterprise reforms, and enhancing competitive advantages, with a development direction centered on precision, internationalization, high-end, and intelligence [4] - The product positioning emphasizes high-end, intelligent, green, and domestically produced equipment, with a commitment to four major transformations: technological innovation, production organization, product form, and business model [4]

Core Viewpoint - Taiyuan Heavy Industry is under investigation by the China Securities Regulatory Commission for suspected violations of information disclosure laws, leading to a significant drop in its stock price and market value [1][3]. Company Overview - Taiyuan Heavy Industry, listed since 1998, specializes in high-end equipment manufacturing and wind power equipment, with a diverse product range including rail transit equipment, lifting equipment, wind power generation equipment, and more, exporting to over 60 countries and regions [3]. - The company has reported a net profit loss in 10 out of the last 12 years, relying heavily on government subsidies and asset sales to maintain its financial appearance [3]. Recent Developments - On November 13, 2023, the company announced a restructuring plan for its wind power business, transferring certain assets and liabilities to its wholly-owned subsidiary, Baise Nengyu Company, and subsequently selling 100% of the subsidiary to its controlling shareholder, Taiyuan Heavy Group, for 1.479 billion yuan [3][4]. - This restructuring aims to focus on wind turbine manufacturing while Taiyuan Heavy Group will handle wind farm construction and operation, thereby enhancing the quality of the wind power equipment industry chain [3][4]. Product Focus - Following the restructuring, Taiyuan Heavy Industry will concentrate solely on manufacturing wind turbines, with capabilities to design and produce a full range of wind turbines from 1.5MW to 16.0MW, including advanced models for both onshore and offshore applications [4].

Core Viewpoint - Taiyuan Heavy Industry (600169.SH) is under investigation by the China Securities Regulatory Commission (CSRC) for suspected violations of information disclosure laws, coinciding with a planned acquisition of related assets [2][4]. Group 1: Investigation and Regulatory Actions - On July 25, Taiyuan Heavy Industry announced that it received a notice of investigation from the CSRC due to suspected information disclosure violations [4]. - The company plans to cooperate with the CSRC during the investigation and will adhere to relevant legal and regulatory requirements for information disclosure [4]. - The investigation may be linked to a recent acquisition plan where Taiyuan Heavy Industry intended to acquire 67% of Taiyuan Xiangming Intelligent Equipment Co., Ltd. for approximately 300 million yuan [2][8]. Group 2: Shareholder Actions - In response to the investigation, Taiyuan Heavy Industry's controlling shareholder, Taiyuan Heavy Machinery Group, announced a plan to increase its stake in the company by investing between 80 million and 160 million yuan over the next 12 months [2][4]. - As of now, Taiyuan Heavy Machinery Group holds 1.679 billion shares, accounting for 50.15% of the total share capital of Taiyuan Heavy Industry [5]. Group 3: Financial Performance - Taiyuan Heavy Industry reported revenues of 8.04 billion yuan, 8.354 billion yuan, and 9.249 billion yuan for 2022, 2023, and 2024 respectively, with year-on-year growth rates of -3.37%, 4.12%, and 10.71% [6]. - The net profit for the same years was 216 million yuan, 187 million yuan, and 195 million yuan, with growth rates of 31.69%, -13.33%, and 4.17% [6]. - The company has not distributed dividends since 2014, and as of the end of 2024, it reported undistributed profits of -1.182 billion yuan [7]. Group 4: Acquisition and Performance Commitments - The acquisition of Taiyuan Xiangming raised regulatory concerns, particularly regarding its performance fluctuations and accounts receivable [8][9]. - Following regulatory inquiries, Taiyuan Heavy Industry added performance commitments for Taiyuan Xiangming, ensuring net profits of at least 41.93 million yuan, 45.73 million yuan, and 52.15 million yuan for 2025 to 2027 [9]. - The assessment value of Taiyuan Xiangming's 100% equity was set at 447 million yuan, with an appreciation rate of 16.92% [8][9].

Core Viewpoint - The China Securities Regulatory Commission (CSRC) has initiated investigations into multiple listed companies, including *ST Mubang, *ST Wanfang, Ruibeka, and Taiyuan Heavy Industry, for violations related to financial data misrepresentation and information disclosure [1][5]. Group 1: Company Investigations - *ST Mubang is under investigation for suspected false disclosures in its annual reports and other periodic financial statements [1][3]. - Taiyuan Heavy Industry and Ruibeka are also being investigated for information disclosure violations, having previously received warnings from regulatory authorities [1][5]. - The investigations reflect a "zero tolerance" approach by regulatory bodies towards financial fraud, emphasizing the ongoing development of legal frameworks in the securities market [1]. Group 2: Financial Performance and Violations - *ST Mubang, which transitioned from a toy business to solar energy production, reported a net loss of 1.16 billion yuan for 2024, attributing this to overcapacity and intense competition in the solar industry [3][4]. - The company has been found to have committed four major violations, including inaccurate financial information and improper use of raised funds, leading to corrective measures from the Jiangxi Securities Regulatory Bureau [4]. - Taiyuan Heavy Industry has experienced significant fluctuations in its net profit from 2022 to 2024, with figures of 88.92 million yuan, -16.64 million yuan, and 28.02 million yuan respectively [6][7]. - Ruibeka reported a net loss of 118 million yuan in 2024, marking its first loss since going public, and has been cited for multiple disclosure issues by the Henan Securities Regulatory Bureau [7]. - *ST Wanfang's financial indicators have triggered delisting risk warnings, with a net profit of 10.65 million yuan for 2024 and a negative net profit of -460.13 million yuan after excluding non-recurring items [8].

Core Insights - The 2025 Thailand International Logistics Exhibition promotional roadshow was successfully held in Kunming, focusing on new opportunities in cross-border logistics [1] - The event was co-hosted by the Thai Ministry of Commerce's International Trade Promotion Department and Thai Exhibitions Company, gathering industry elites [1] - The exhibition will take place from August 20-22 at the Bangkok International Trade and Exhibition Centre, featuring a wide range of logistics services and innovations [1][5] Industry Overview - The exhibition is the eighth ASEAN 10+6 logistics industry event, showcasing 415 brands from 25 countries and integrating over 10,000 logistics service providers and users [5] - Key areas of focus include material handling, packaging, warehousing, logistics information technology, and various transportation services [5] - The event will also host trade logistics seminars and forums to provide professional knowledge and networking opportunities for participants from diverse sectors [5] Company Engagement - The company has maintained a deep collaboration with the exhibition organizers, establishing strong relationships with the Thai Ministry of Commerce and various logistics associations [8] - The company aims to explore new logistics technologies and solutions at the exhibition to further develop its cross-border e-commerce business [8]

Core Viewpoint - Taiyuan Heavy Industry is undergoing significant business restructuring, focusing on core operations and achieving continuous improvement in performance through strategic acquisitions and divestitures [2][5][9]. Business Acquisition and Restructuring - The company plans to acquire 67% of Taiyuan Xiangming Intelligent Equipment Co., Ltd. for approximately 300 million yuan, paid in cash, which is expected to create substantial industrial synergies and expand its business footprint [2][3]. - The acquisition includes a 51% stake from its controlling shareholder, Taiyuan Group, and an additional 16% from other stakeholders [3]. - The net asset valuation of Taiyuan Xiangming is approximately 447 million yuan, with a valuation increase of 64.7 million yuan, reflecting a 16.92% increase [3]. Financial Performance - In Q1 2025, the company reported revenue of 2.768 billion yuan, a year-on-year increase of 60.18%, and a net profit of 21.975 million yuan, up 7.62% [10]. - For the full year 2024, Taiyuan Heavy Industry achieved revenue of 9.249 billion yuan, a 10.71% increase, and a net profit of 195 million yuan, growing by 4.17% [9]. Inventory Management - As of Q1 2025, the company's inventory stood at 8.991 billion yuan, a decrease of 12.37% compared to the previous year [10][12]. - The inventory levels have shown a consistent decline from previous years, indicating improved inventory management [11]. Focus on Core Business - The company has divested from wind power-related assets to concentrate on its core business, which includes manufacturing equipment for various industries such as metallurgy, mining, and transportation [5][7]. - The divestiture of wind power assets has helped improve asset quality and reduce litigation risks associated with underperforming projects [6][7]. International Market Expansion - Taiyuan Heavy Industry is building an international marketing system, establishing overseas companies in countries like India, Indonesia, Kazakhstan, Turkey, and Germany [12]. - In 2024, the company generated 2.178 billion yuan from overseas markets, accounting for 23.55% of total revenue, with a growth rate of 20.15%, surpassing domestic market growth [12][13].