XCMG (SHE:000425) is a Buy

With an annual revenue of $15.1 billion, leading Chinese construction machinery manufacturer XCMG (SHE:000425) has moved up to a historic third place in the Yellow Table 2021 ranking of the world's top 50 construction equipment manufacturers released by British publisher KHL Group, the highest-ranking company among Chinese manufacturers.

XCMG Makes Global Top Three on KHL’s Yellow Table 2021 for the First Time.

In 2020, the total revenue of Chinese companies recorded significant growth, contributing $191.5 billion to global OEM sales which accounted for more than 20 percent for the first time, with China overtaking the United States as the number one construction equipment manufacturing power in the world.

"Although China's 'super large-scale market' has brought huge development opportunities to the Chinese construction machinery industry, in the long run, China's integration into the global market is an irreversible trend. As China continues to strengthen its position in the global economic arena, our equipment manufacturing industry will see significant growth on a global scale," said Wang Min, chairman and CEO of XCMG.

China's construction machinery manufacturers have achieved major breakthroughs in product and technological innovations, with high-end, large-scale and intelligent equipment products springing up one after another – not only leading the trends across Chinese and global construction industry, but also serving as major forces in many key construction projects. This growing product competitiveness is enabling Chinese construction equipment to substitute imported products across the board.

Leading technology, ongoing exploration

XCMG's leading crane and excavator products are selling strongly in the international market. It has sold tens of units of the 1,600-ton all-terrain crane, and large-tonnage products are especially in short supply. XCMG's latest layout of harbor machinery is accelerating market development, while a series of industrial and new infrastructure projects such as precision casting, high-end hydraulic valves, concrete machinery and maintenance machinery are being carried out successively.

XCMG's globally collaborative R&D system has conquered key technologies to contribute many "firsts" – the world's largest crawler crane XGC88000, "mining giant" 700-ton hydraulic excavator, ultra-class wheel loader XC9350, as well as more than 100 units of major equipment.

To embrace the digital age and better serve customers, XCMG has promoted digital, intelligent and unmanned transformation and upgrading. It has launched the key digital product XCMG-Global Service System (X-GSS) to provide accurate, value-added and satisfactory maintenance support for global customers.

As of now, XCMG owns more than 7,500 authorized patents, more than 1,700 patents for invention and 81 PCT international patents, and it has set four international standards.

Promoting mutual benefits across the entire industry chain

Thanks to Chinese government's strong and efficient control of the COVID-19 pandemic and the quick recovery of the nation's economy, the Chinese construction machinery industry has performed outstandingly in the global market.

During the early COVID-19 outbreak in 2020, XCMG has led production resumption upstream and downstream of the industry chain to ensure timely delivery of products. It has optimized the industrial chain to attract a large number of companies to be part of the supply chain and market system.

XCMG always adheres to the "four-in-one" value with suppliers, distributors and customers, working hand-in-hand to promote product R&D, technological innovation, production improvement and more to achieve mutual benefits for all parties. It has led more than 60 enterprises and research institutions to establish the first strategic alliance of industrial technology innovation in construction machinery industry. The "Hanyun" Industrial Internet Platform now connects more than 800,000 units of equipment, managing asserts totaling US$93.25 billion and covers more than 20 countries along the "Belt and Road" Initiative.

About XCMG

XCMG is a multinational heavy machinery manufacturing company with a history of 78 years. It currently ranks fourth in the world's construction machinery industry. The company exports to more than 187 countries and regions around the world.