Posted May 13, 2024

XCMG Machinery announces 20 percent dividend increase following record-breaking performance

2023 sees 92.848 billion yuan ($5.24 billion USD) revenue, 40.09 percent due to international business.

XCMG Machinery has announced a proposed 20 percent increase in its annual dividend, following a year that saw the company achieve a historic high in international revenue. The company's business income reached 92.848 billion yuan, with international revenue soaring to 37.220 billion yuan, accounting for 40.09 percent of total income.

The proposed dividend for the fiscal year 2023 stands at 1.80 yuan per ten shares (tax included), amounting to approximately 2.127 billion yuan in cash dividends—a significant increase from the previous year and representing 40 percent of the company's net profit attributable to the parent. Additionally, XCMG is actively implementing a stock buyback plan valued between 300 million and 600 million yuan.

Despite facing profound changes in both domestic and international competence environments throughout the year, XCMG achieved double-digit net profit growth while enhancing gross margin and sales net profit margin. The company also successfully reduced accounts receivable and inventory levels; continued to increase market share across most product lines; witnessed rapid revenue growth from strategic emerging industries exceeding 20%; and saw revenues from new energy-related equipment and businesses double for two consecutive years, nearing ten percent of total revenue.

A key indicator of profitability—the overall gross margin—reached an impressive figure of 22.38 percent, marking an improvement of 2.17 percent compared to previous years across various product categories combined, including cranes, earth-moving machinery, and concrete machinery, among others, regardless of domestic or overseas markets.

By the end of December 2023, XCMG had effectively reduced accounts receivable by 1.13 percent and inventory amounts by 7.75 percent compared to 2022—demonstrating strong financial management, which resulted in a net cash flow from operating activities amounting to approximately 3.57 billion yuan—an increase exceeding 125.59 percent over last year.

Underpinning these achievements is XCMG’s unwavering commitment to its internationalization strategy, which has seen it deepen its global development layout through export trade, overseas greenfield manufacturing investment, multinational acquisitions, as well as global R&D efforts, providing comprehensive marketing services, full value chain services, and complete solutions to worldwide clients, leading significant growth in the international business segment during this period.

Souces report that XCMG's thriving business is attributed to its strategy, led by technological innovation. In 2023, XCMG's digital supply chain initiative was recognized as a key industrial internet project in Jiangsu Province, China, adding five provincial industrial internet benchmark factories. The company achieved level three maturity in intelligent manufacturing capabilities with three enterprises, and the XCMG Hoisting business unit and XCMG Transmission were newly included in the Ministry of Industry and Information Technology's 5G Factory Directory. Additionally, the Intelligent Manufacturing Factory of XCMG Loaders was selected for the national intelligent manufacturing demonstration factory, and XCMG Machinery ranked first nationwide in the Ministry of Industry and Information Technology's 2023 New Generation Information Technology and Manufacturing Integration Development Demonstration List.

XCMG Machinery has reported a first-quarter operating revenue of 24.041 billion yuan this year, up by 0.96 percent year-on-year, with a net profit attributable to the parent of 1.6 billion yuan, a 5.06 percent increase from the previous year. The net profit, adjusted for non-recurring items, was 1.466 billion yuan, marking a 12.48 percent increase from last year, thereby maintaining its lead in the domestic sector. The company's ongoing growth is attributed to the dynamic shift toward new energy products, witnessing a surge of over 40 percent, and a notable increase in revenue from spare parts and high-end products, by nearly 15 percent and 5 percent respectively.

In addition, KCMG in 2023, vigorously pursued its social responsibilities, steer its ESG business toward sustainable operations, and is expected to introduce its first-ever ESG report shortly.