Overseas Revenue Grows 4.8%, High-End Products Up Over 10%
Since the beginning of the year, the engineering machinery industry has faced weaker-than-expected conditions, with domestic markets declining and overseas markets experiencing slowed growth. XCMG has adhered to innovation and actively responded to both domestic and international market challenges, focusing on internal transformation and capability enhancement. The company is seeking reform in its development and rejuvenation through reform.
In the first half of the year, XCMG's revenue remained relatively stable, achieving operating revenue of 49.632 billion yuan, continuing to lead the domestic industry. Of this, approximately 27.7 billion yuan came from domestic markets, down 8.72% year-on-year. However, overseas revenue continued to grow, reaching 21.9 billion yuan, up 4.8% year-on-year, with international revenue accounting for 44% of total revenue, an increase of 3.37 percentage points. The combined market share of overseas product sales reached 4.43%, up 0.58 percentage points year-on-year. Key products such as excavators, loaders, rollers, and aerial work platforms all saw increased market share abroad. Revenue from all-terrain cranes and rough terrain cranes nearly doubled, excavator overseas revenue grew by 16% year-on-year, and global collaboration in concrete equipment showed initial results, with revenue from overseas pump trucks and mixing stations doubling and revenue from mixing trucks nearly tripling. Alongside the growth in international revenue, the gross margin increased to 24.41%, up 1.22 percentage points year-on-year.
Compared to the domestic market, which is in a cyclical bottoming phase, the overseas market offers vast potential with lower cyclical volatility. The increase in overseas revenue proportion is expected to further drive XCMG's operating performance and profitability, thereby navigating the industry cycle with stability.
Profitability Continues to Improve, Operational Quality More Robust
While maintaining resilient revenue, XCMG Machinery saw continued improvement in profitability during the first half of the year.
Despite challenges such as a significant increase in shipping costs, XCMG, with nearly half of its revenue coming from overseas, achieved a gross margin of 22.89% for the first half of the year, a slight increase from the previous year.
Financial expenses for the first half were 1.328 billion yuan, compared to -317 million yuan in the same period last year. This change is mainly due to an increase in foreign exchange losses (up 1.688 billion yuan year-on-year). Nevertheless, through cost reduction and efficiency measures, the company still achieved a net profit attributable to shareholders of 3.706 billion yuan, a year-on-year increase of 3.24%. The net profit margin was 7.5%, up about 0.5 percentage points from the previous year. XCMG continues to lead the industry in both revenue and net profit.
Not only is the company highly profitable, but it also has a solid performance in financial quality. During the first half of the year, XCMG generated operating cash flow of 1.706 billion yuan, an 11% increase year-on-year. The debt-to-asset ratio was further reduced by 1.24 percentage points on top of a 4.27 percentage point decrease from the previous year, and inventory was reduced by 2.16 billion yuan. The company's high-quality, intrinsic development is increasingly tangible.
Additionally, XCMG maintained a strong focus on innovation with substantial research and development investment totaling 2.461 billion yuan, a 0.72% increase year-on-year. The company secured 659 new invention patents and 43 international patents in the first half of the year.
