XCMG (000425.SZ), ranked third largest manufacturer of construction machinery globally by KHL, released their semiannual report for H1 2021 on August 31, reporting revenue of 53.234 billion yuan (USD 8.247 billion) marking 51.8% growth year-on-year. XCMG also achieved 3.803 billion yuan (USD 589.165 million) in net profit attributable to shareholders of a listed company, increasing 84.46% year-on-year, and 3.751 billion yuan (USD 581.127 million) of net cash flow from operating activities, leaping 648.58% year-on-year.
Key financial indicators include:
- The company’s operating income was 53.234 billion yuan (USD 8.247 billion), a year-on-year increase of 51.8%, of which overseas revenue accounted for 4.854 billion yuan (USD 752 million), year-on-year growth of 68.5%.
- XCMG has focused on the weak links of profitability, continuing to optimize its product line up and management processes to improve performance and profitability. The net profit attributable to the parent company was 3.803 billion yuan (USD 589.165 million), a year-on-year increase of 84.46%.
It is remarkable that XCMG achieved high-quality growth in Q2 2021 despite industry sales declines and sharp increases in raw material costs, demonstrating strong profitability and development flexibility.
In the first half of 2021, XCMG actively promoted the overall listing of XCMG Engineering Machinery Co., Ltd. and inspired management and staff to kickoff new projects with passion.
Increasing Core Competitiveness, All Sectors at Full Throttle
XCMG is the manufacturer with the most comprehensive product line and layout across the global construction machinery industry. In the first half of the year, sales of eight main equipment products increased by 32.9% year-on-year in the market, while the 43.3% growth that XCMG achieved is 10.4% higher than the industry average. XCMG’s product portfolio is now fully developed, exhibiting further core competitive advantages.
70% Increase in Overseas Sales Reflects Comprehensive Improvement of International Operation Capabilities
Looking at the composition of operating income, XCMG’s domestic sales revenue in the first half of 2021 increased 50.30% year-on-year, while overseas sales revenue was up 68.50% year-on-year, highlighting the remarkable success of its main international strategy.
XCMG Brazil has won the largest order in South America for the past 10 years, and Germany’s Schwing played a key role as an overseas platform to coordinate XCMG’s international businesses in Germany, United States and India.
In the first half of the year, XCMG has accelerated building overseas market channels, service outlets and spare parts guarantee system, further consolidating its international marketing and service architecture. The company has promoted a “Global Business Partnership Program” and signed 25 new overseas distributors.
64.43% Increase in R&D Drives XCMG’s Full-on Digital Transformation of “Intelligent Manufacturing 4.0”
In H1 2021, XCMG invested 2.218 billion yuan (USD 343.656 million) in R&D expenses, a 64.43% year-on-year increase, and the proportion of R&D investment accounts for 4.17% of operating income.
XCMG will promote its digital transformation based on the new “Intelligent Manufacturing 4.0” model, strengthening the layout and construction of the new generation of information technologies including big data, artificial intelligence, 5G, industrial internet and digital twin as well as accelerating intelligent manufacturing to reach the leading position worldwide.
As of the end of June in 2021, XCMG holds a total of 6,075 valid patents, including 1,569 patents for invention and 99 international patents. In the first half of 2021, XCMG formulated eight national and industry standards. Accumulatively, XCMG has five international patents and formulated 180 national and industry standards.
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