Third quarter report of XCMG Machinery: gross profit margin increased by 2.7 percentage points, further promoting high-quality development

XCMG Machinery (000425) released its third quarter report on the evening of October 30th, showing a significant increase in cost reduction and efficiency, as well as a significant increase in gross profit margin. In addition, the company's cash flow has improved, research and development expenses have increased, and new achievements have been made in implementing the concept of connotation based high-quality development.

Reduce costs and increase efficiency, continue to increase gross profit margin

In the first three quarters, XCMG Machinery achieved a revenue of 71.67 billion yuan, a year-on-year decrease of 4.51%. Among them, in the third quarter, 20.39 billion yuan, a year-on-year decrease of 3.83%, narrowed compared to the first half of the year.

Although XCMG Machinery's revenue has slightly decreased, the company's gross profit margin has significantly increased. In the first three quarters of last year, the company's sales gross profit margin was 20.22%, while in the first three quarters of this year, it reached 22.90%, an increase of about 2.7 percentage points. The net profit margin of sales has also increased, from 6.32% in the same period last year to 6.71% in the first three quarters of this year.

XCMG Machinery's gross profit margin in the first half of the year was 22.86%. The company had previously stated in its semi annual report that it had achieved a net cost reduction of 1.39 billion yuan in procurement and a net cost reduction rate of 4.53%. With the further increase in gross profit margin in the third quarter report, it may mean that the results of cost reduction and efficiency improvement will be further demonstrated.

Thanks to factors such as increased profit margins, XCMG Machinery achieved a net profit attributable to shareholders of the listed company of 4.839 billion yuan in the first three quarters, a year-on-year increase of 3.50%. Among them, in the third quarter, it achieved a net profit attributable to shareholders of the listed company of 1.25 billion yuan, a year-on-year increase of 23.82%.

Along with the increase in net profit, XCMG Machinery's operating cash flow also increased by 5.71%. According to the cash flow statement data, the company received 72.3 billion yuan in cash from selling goods and providing services in the first three quarters of last year, and reached 74.6 billion yuan in the same period this year.

Strengthen research and development, continuously improve innovation capability

The overall demand of the construction machinery industry is closely related to the amount of fixed assets investment, and has a certain periodicity due to the cyclical changes in the macro-economy. But no matter how the situation changes, XCMG has always adhered to the leadership of technological innovation.

From January to September this year, XCMG's machinery sales expenses decreased year-on-year, but research and development expenses increased instead of decreasing. Its research and development expenses reached 2.921 billion yuan, continuing to increase from 2.861 billion yuan last year. Excluding R&D expenses (excluding development expenses that meet the capitalization criteria for R&D expenses), the proportion of R&D expenses to operating revenue in the first three quarters of this year has also reached 4.08%.

"We are laying out the 'national treasure' and breaking through the bottleneck problem. We are accelerating the acquisition of key core technologies, promoting the early localization of high-end core components, and firmly occupying the high-end value chain of the industrial chain." Yang Dongsheng, Chairman and Party Secretary of XCMG Group and XCMG Machinery, introduced earlier that in recent years, XCMG has continuously achieved new breakthroughs in the field of technological innovation, Has successively won 7 manufacturing industry single champion enterprise or product titles awarded by the Ministry of Industry and Information Technology.

In Northeast China, XCMG XCA2600, the world's number one crane, made its debut by lifting a 126m high and 127t wind turbine in just 21 minutes; In the Shenyan Coal Mine in Shaanxi, XCMG's unmanned mining card has overcome multiple difficult technologies such as environmental perception and navigation positioning, becoming a model for the construction of national smart mining benchmark projects; At Ma'anshan, XCMG XGT15000-600S, a global mega tower crane, participated in the hoisting of the main tower of the Yangtze River Bridge

In just the first half of the year, the company organized and implemented 403 scientific research and development projects, and launched more than 280 new products.

At present, XCMG Global R&D Center has become an important innovation carrier to attract global high-end talents, support global technological innovation and breakthroughs in high-end markets. It has developed a batch of excellent products with independent intellectual property rights and in compliance with local technical standards, greatly enhancing XCMG's domestic and global collaborative R&D capabilities and levels.

Analysts have indicated that overseas construction machinery is in an overall upward cycle; According to the update cycle of construction machinery, the domestic market is expected to usher in a new round of updates from 2024 to 2025. A few days ago, the news that an additional 1 trillion treasury bond was issued to increase investment in infrastructure also made construction machinery welcome good news.

As the leading engineering machinery company with the most complete product line, XCMG Machinery is crossing the industry cycle and taking a steady step towards the path of "leading and climbing".