Amid the fierce competition between Zoomlion and Sany Heavy Industry, although the industry development has not improved, some enterprises such as Sunward Intelligent and XCMG are still developing well.

The long-dormant rare earth sector has regained its glory, and XCMG's rare earth strategy may yield good returns.

XCMG's Entry into Rare Earths: A Right Move

The Ministry of Industry and Information Technology recently held a national rare earth work conference to mobilize and deploy further efforts to strengthen mining, smelting and separation, environmental protection, import and export order rectification, and management of the rare earth industry. Stimulated by this, heavy rare earth prices have surged since early July, with dysprosium oxide, among the top gainers, soaring 77% in less than a month, including a nearly 30% jump in the three days after July 25. Benefiting from the Ministry's plan to rectify the national rare earth sector, the sector topped the gainers, with Shenghe Resources, China Minmetals Rare Earth, and China Nonferrous Engineering among the top performers.

On November 10, 2012, XCMG Machinery announced that it had completed a capital increase of 490 million yuan in its subsidiary XCMG Investment. The funds will be used together with Ganzhou State-owned Assets Company and Ganzhou Hongtai to establish "Ganzhou Rare Earth Reserve Company," in which XCMG holds a 49% stake. The company is mainly engaged in the sales of rare earth separation products and rare earth metals.

When explaining the reasons for investing in the establishment of "Ganzhou Rare Earth Reserve Company," XCMG Machinery stated: Due to the scarcity of rare earth resources, their wide applications, and China's unique position in rare earth reserves and supply, the investment in the reserve company will expand the company's business scope, enhance its visibility in the resource sector, and is expected to achieve substantial investment returns.

The long-dormant rare earth sector has regained its glory, and news of soaring rare earth prices has once again sparked market enthusiasm. Now it appears that XCMG Machinery's diversified development is likely to yield significant returns, and the development of XCMG's rare earth business will strengthen its engineering machinery business.

XCMG Group Expands Industrial Base

In the easternmost part of Fengxian District, at the Lingang Fengxian Industrial Park, following Sany Heavy Machinery, the construction of another large domestic enterprise, XCMG Group, is also accelerating.

When the reporter arrived at the construction site of Phase I of XCMG Group's Lingang Fengxian Park, it was raining heavily. To ensure the safety of construction workers, work on the site had been temporarily suspended. However, from the steel structures under construction, it is not difficult to see the grand scale of the future park. As the industry leader in scale for 23 consecutive years, XCMG Group is investing 3.2 billion yuan in the Phase I project in Fengxian, which upon completion will have an annual output value of 10 billion yuan.

The construction of XCMG Group's Lingang Fengxian Park is divided into three phases, with a cumulative investment of 10 billion yuan, covering 2,330 mu, and an annual output value of up to 30 billion yuan. The key to maintaining such economic benefits is the core competitiveness of the company's products. XCMG's 15-40 ton hydraulic excavators lead in technology and are widely praised in the industry. Once the Phase I project is completed, it will have an annual production capacity of 20,000 units. It is precisely because the company has mastered core technologies and has future production capacity guarantees that a 1:3 input-output ratio is not surprising.

It is also learned that as of the end of June, XCMG Excavator Machinery Co., Ltd. has increased its excavator production capacity, and a number of projects such as XCMG Group's four-wheel and one-track parts and test site are progressing rapidly. XCMG's construction machinery base project involves a single investment of 18.45 billion yuan, the largest among 18 equipment manufacturing projects in Jiangsu Province.

XCMG Group Ranks 5th in Global Road Machinery

In the latest global top 10 road machinery list published by relevant media, XCMG Group ranked 5th and is the only Chinese company to make the list.

In 2012, in a relatively sluggish global road equipment market, XCMG set its sights on becoming a global leader in the road machinery industry and revitalized synergies through business integration. That year, XCMG's road and compaction machinery achieved sales revenue of $642 million, leading the world with a sales growth rate of 35%. Next, XCMG will further strengthen its leading advantage in the global road machinery field on the basis of its highly competitive integrated construction and maintenance platform.

XCMG Truck-mounted Crane Sales Revenue Exceeds 440 Million in Jan-Jun

Entering 2013, the entire construction machinery industry encountered unprecedented fierce competition, with an obvious downward trend. Affected by the industry, XCMG Truck-mounted Crane Company's sales revenue from January to May was consistently declining year-on-year. To this end, the marketing company increased market promotion efforts, with sales from key accounts and offices advancing together, and the market share of truck-mounted cranes increased month by month, now reaching 55%.

In addition, products such as aerial work platforms, bridge inspection vehicles, and sanitation vehicles all achieved good year-on-year growth. As of the end of June, the company's sales revenue totaled 448.9 million yuan, achieving year-on-year growth, reversing the unfavorable market decline and laying the foundation for various product divisions to continue their efforts in the second half of the year and complete annual targets.

XCMG Machinery Issues 2.5 Billion Yuan Convertible Bonds for Mixing Machinery Upgrade

On the evening of July 31, XCMG Machinery (000425) announced that, according to the review results of the China Securities Regulatory Commission's Public Offering Review Committee meeting on July 31, the company's application for public issuance of convertible corporate bonds was approved with conditions.

The company previously announced its plan to publicly issue convertible bonds to raise no more than 2.5 billion yuan for four projects including concrete mixing machinery upgrades. The convertible bonds have a term of six years from the date of issuance.

As of 17:09, XCMG's stock price today rose 2.14% to 7.64 yuan.

Source: China Construction News