At the end of March this year, the delivery ceremony of Zoomlion's 600-ton all-terrain crane was held in Jakarta, Indonesia, which became another milestone for Zoomlion to break through the Indonesian market. Driven by the localization development strategy of key countries, Zoomlion's overseas business development momentum will be strong in 2023. According to the company's 2023 annual report, its overseas revenue increased by 79.2% year-on-year, and effective breakthroughs were achieved in key overseas markets.
In fact, in the past year, due to the decline in domestic real estate infrastructure investment, domestic sales and other factors, the overall performance of the domestic construction machinery market was flat, and the overall sales of excavators and loaders declined year-on-year, and the demand was relatively weak. However, in stark contrast, judging from the 2023 annual report that has been disclosed so far, the listed companies of construction machinery have shown strong resilience in the overall cold situation of the construction machinery industry, and the profitability has increased against the trend, and the upgrading of the way of playing around overseas business has become the secret of growth.
▌Industry fluctuations show the resilience of enterprises
The overall cold market is a true portrayal of the construction machinery industry in the past year. According to incomplete statistics, among the more than 10 construction machinery and equipment categories announced by the China Construction Machinery Industry Association, nearly 7 percent of the overall sales of products will decline in 2023.
Taking excavators, loaders and other major varieties as an example, according to the data of China Construction Machinery Industry Association, the overall sales of excavators in 2023 will decrease by 25.4% year-on-year, and the overall sales of loaders will decrease by 15.8% year-on-year, mainly due to the drag of domestic sales.
However, compared with the sluggish domestic market, the export sales data of excavators and loaders in 2023 are in obvious contrast, of which the export sales of loaders in 2023 increased by 11.5% year-on-year, while domestic sales decreased by 30.1% year-on-year.
The relatively good export business also brings returns to the relevant listed companies. Zoomlion's 2023 annual report shows that the company's annual revenue was 47.075 billion yuan, a year-on-year increase of 13.08%; net profit was 3.771 billion yuan, a year-on-year increase of 58.13%; the net profit attributable to the parent company was 3.506 billion yuan, a year-on-year increase of 52.04%; The net profit after deducting non-attributable to the parent company was 2.708 billion yuan, a year-on-year increase of 109.51%. The company plans to distribute a cash dividend of 3.20 yuan (tax included) for 10 shares, with a total dividend amount of more than 2.7 billion yuan and a dividend rate of about 80%.
It is worth mentioning that driven by the globalization strategy, Zoomlion continues to move towards the high-end of the global value chain. According to the annual report, the company's overseas revenue in 2023 will reach 17.905 billion yuan, a year-on-year increase of 79.2%, and the proportion of overseas revenue will further increase to 38.04%, a record high.
"On the one hand, the expansion of overseas markets has achieved remarkable results; On the other hand, emerging business sectors such as excavators, aerial work machinery, and mining machinery have developed rapidly; At the same time, the company continued to promote cost reduction and efficiency improvement, continuously improved its operation and management level, and effectively improved its profitability. For the performance growth in 2023, Zoomlion said.
Not only Zoomlion, according to Shenwan's industry classification, among the 19 listed companies that disclosed their 2023 annual reports, 15 of them had a year-on-year increase in net profit, of which 11 had an increase of more than 30%.
"There are three reasons for the contrarian growth of performance, one is the deep moat of high-quality leading listed companies, reducing costs and expenses through comprehensive management, and reducing the impact of domestic sales fluctuations to the greatest extent; second, the export business performance is gratifying; The third is to actively develop high-quality products in emerging fields and further build the ability to prevent risks. An industry source told the China Securities Journal reporter that if you want to rank the weight of these reasons, it can be clear that the high-quality development of export business is an indispensable and important factor for the growth of related enterprises against the trend.
In the view of the above-mentioned people, the construction machinery industry is undergoing a transformation, and can grasp the opportunity of industry change, especially the enterprises that have a plan and judgment to reshape the overseas business operation mechanism, and the future development is expected to be guaranteed.
As for the market development trend of the domestic construction machinery industry this year and next year, industry insiders generally believe that the overall is still at the bottom of the area, but the trend of subsequent recovery is relatively clear. "Overall, the market has not been prosperous in recent years, but the risk of the market continuing to decline has been basically resolved. At the moment, the market is in the bottom zone and is not far from a recovery. Fei Chunjiang, chairman and general manager of Komatsu (China) Investment Co., Ltd., expects that the domestic construction machinery market has reached the end, and there will be a slight and gradual rebound later.
Meng Xianghong, deputy general manager of the production supervision center of China Railway Co., Ltd., also believes that the purchase of related construction machinery and equipment is expected to rebound in the second half of this year and may grow steadily next year. According to Bai Yunfei, deputy general manager of the operation management department of China Railway Construction Co., Ltd., even if there will be no significant recovery in 2024, it will slowly recover in 2025.
▌Overseas market development is impressive
XCMG XE150BR hydraulic excavator broke ground in Chile, XCMG Australia R&D Center was officially unveiled, and more than 100 XCMG aerial work platform products were exported to Central America in batches...... Since April, large listed companies of construction machinery represented by XCMG Machinery have reported frequent successes.
"The establishment of the Australian R&D center marks another solid step in XCMG's journey to build a more open and innovative internationalization." Liu Jiansen, vice president of XCMG Machinery, said that this move will greatly improve XCMG's technology research and development capabilities and market service quality.
In order to better expand international business, Yang Dongsheng, chairman and secretary of the Party Committee of XCMG Group and XCMG Machinery, previously said that in the future, it will carry out comprehensive cooperation with COSCO Shipping Group in digital supply chain, overseas routes, green and intelligent logistics.
Accelerating the construction of the airport base has also become the key work of Zoomlion's overseas business. The company said that it will continue to improve the localized operation mechanism, drive the refined management of airport bases with digitalization, and enhance the core capabilities of overseas airports. At the same time, it will accelerate the expansion and upgrading of overseas R&D and manufacturing bases to enhance the global competitiveness of enterprises.
Driven by the comprehensive internationalization strategy, LiuGong's overseas business momentum is also strong. Recently, 19 sets of Liugong B230 bulldozers were successfully packed and shipped from the Liugong bulldozer manufacturing base to customers in West Africa. At the beginning of April, 10 Liugong W915E wheeled excavators lined up and delivered to key customers in the Asia-Pacific region.
It is understood that since the beginning of this year, the production and sales of Liugong wheeled excavators have been booming, and the monthly sales volume in the first quarter has increased significantly year-on-year, and a variety of wheeled excavators have been delivered in batches. In overseas markets, Liugong wheeled excavators sell well in Russia, Southeast Asia and other markets, and have also won orders in West Asia, Central Asia, Latin America and other regions.
The financial data is more obvious. According to statistics, among the 19 listed construction machinery companies that disclosed their 2023 annual reports, 15 clearly disclosed their overseas business income in 2022 and 2023. It is worth mentioning that according to the comparable statistics, these 15 companies have achieved growth in overseas business revenue in 2023.
The reporter found that among the above 15 companies, 11 overseas revenue growth rate was more than 30%. Among them, the overseas business of XCMG Machinery, Zoomlion and Liugong has achieved good growth on the basis of a large base (more than 8 billion yuan) in 2022.
Since the beginning of this year, the overseas market has generally shown a certain fluctuation trend, and it is particularly important to adjust the layout according to the actual development of overseas business. "Except for a few regions that are in an adjustment period due to market impact, all other regions have achieved profitable sales growth. In the first quarter of this year, the company's overall overseas revenue exceeded 3.8 billion yuan, exceeding the annual revenue of 2020, and the net profit set a record for the same period in history. The relevant person in charge of Liugong said that it will pay close attention to the overseas market situation and customer needs, adjust the market strategy and resource tilt as needed, and take appropriate and necessary measures to promote the sustainable growth of overseas business.
"Construction machinery factory is gradually leapfrogging from 'product to sea' to 'industry to sea', and the further deepening of the globalization strategy is not only necessary for the development of the industry, but also to provide a guarantee for building sustainable competitiveness in the future." A senior executive of a large listed company in the industry told reporters that the early single-point product test can no longer meet the current industry development pattern, and the systematic and industrialized channel connection and the construction of a complete overseas business chain determine whether the relevant enterprises can achieve a breakthrough in the future.
▌Institutional research "heavy on the outside and inside"
For a period of time, the institution's attention to the construction machinery industry has also remained hot. Wind data shows that since the beginning of this year (from January 1 to May 9 as the statistical interval), the number of surveys and the number of institutions participating in the research of listed companies of construction machinery have increased compared with the same period last year.
Since the beginning of this year, Zoomlion has been surveyed 4 times, attracting a total of 195 institutions to participate, becoming the construction machinery enterprise with the most participation in the survey. Judging from the content of the survey, overseas business is the direction that institutions focus on.
"It is expected that the growth rate of China's construction machinery export industry will slow down in 2024, and the performance of different countries and regions may be differentiated." Zoomlion said in the survey that the company has the advantages of diversified regions and diversified products, coupled with the unique "end-to-end, digital" overseas business development system, and is expected to still achieve a performance growth rate higher than the overall level of the industry.
"At present, the company's overseas market share is not as good as that in China, and we hope to greatly increase our market share in overseas markets in three to five years." As for how to develop overseas markets, Tongli said that it will work closely with central enterprises and large companies to build through the existing layout, and will select overseas high-quality dealers to strengthen cooperation.
XCMG revealed in the survey that it will further increase the proportion of revenue from medium and high gross margin products, reduce the proportion of revenue from low gross margin products, and increase the proportion of overseas business revenue (the current gross profit margin and profit margin are greater than those in China). At the same time, on the basis of the increase in gross profit margin in 2023, it plans to further increase gross profit margin in 2024.
The development of domestic business is also under focus. Zoomlion said in an institutional survey that the domestic market of the construction machinery industry is at the bottom of the cycle, and the infrastructure investment led by local government special bonds and special treasury bonds is expected to continue to play a supporting effect, and at the same time, the superimposed equipment renewal policy traction may accelerate the stabilization and recovery of the industry to a certain extent.
"The company will continue to incubate new businesses to meet market demand, to achieve category expansion, at present, to earth-moving machinery, aerial work machinery, agricultural machinery, mining machinery as the representative of the new sector has shown a strong growth trend, ironing out the company's traditional industry cycle attributes in the domestic market." Zoomlion said.
"Overall, there will be an increase in the market in the future, but it will mainly be concentrated in relatively large construction machinery enterprises, and it is difficult for smaller enterprises to adapt to competition." Tongli shares in the future of the overall operation of the domestic market judgment.
Zhuozhong construction machinery media organization
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