Core Viewpoint - LiuGong (000528) has established a regular communication arrangement with institutional investors, emphasizing its commitment to transparency and strategic execution to achieve its 2030 goals [1] Group 1: Investor Communication - The company actively communicates with various institutional investors through performance briefings, analyst conference calls, regular roadshows, invited research, and machinery brand exhibitions [1] - LiuGong adheres to regulatory requirements while engaging with both domestic and foreign institutional investors [1] Group 2: Strategic Goals - The company believes that strong strategic execution, leading product technology, and practical actions will ensure the timely achievement of its 2030 strategic objectives [1] - LiuGong is committed to enhancing shareholder value over the long term [1]

Financial Performance - The company reported a total revenue of 18.181 billion yuan for the first half of 2025, representing a year-on-year increase of 13.21% [1] - The net profit attributable to shareholders reached 1.23 billion yuan, up 25.05% year-on-year [1] - The gross margin improved to 22.32%, an increase of 1.0% compared to the previous year [1] - The net profit margin slightly increased to 6.34%, up 0.11% year-on-year [1] - The company's accounts receivable reached 12.877 billion yuan, a 24.25% increase year-on-year [1] Market Outlook - The domestic market for earthmoving machinery is expected to continue its growth momentum, with overall sales of excavators and loaders projected to achieve double-digit year-on-year growth [7] - The international market faces challenges due to global trade protectionism, but there is potential for gradual recovery in 2026 [7] - The company aims to enhance its brand and market influence in Europe through improved sales and channel networks, as well as ESG initiatives [8] Strategic Initiatives - The company is focusing on a comprehensive strategy that includes full solutions, full automation, and full internationalization to drive growth [6] - The management emphasizes the importance of cash flow and debt management, with a current ratio of monetary funds to current liabilities at 48.76% [4] - The company is committed to maintaining a healthy competitive environment in the electric loader market, advocating for innovation and product quality as key to sustainable development [9]

Group 1 - The core viewpoint highlights the transformation of Liuzhou into a hub for "artificial intelligence + manufacturing," showcasing advanced smart factories and automation in traditional industries like automotive and machinery [1][3]. - Liugong Machinery Co., Ltd. has implemented automated production lines and intelligent logistics systems, achieving high levels of automation and efficient material flow, with an average of one loader produced every five minutes [3][5]. - The sales of Liugong's new energy loaders have exceeded expectations in the first half of the year, significantly surpassing industry forecasts, indicating strong growth in emerging markets and successful expansion into mature markets like Europe [3][5]. Group 2 - SAIC-GM-Wuling has initiated the "125 Project" to accelerate the electrification and intelligent transformation of its new energy vehicles, aiming to create a comprehensive ecosystem for electric and hybrid vehicles [3][5]. - In Indonesia, SAIC-GM-Wuling has sold over 40,000 new energy vehicles, achieving a market share of over 37%, making it the most popular Chinese automotive brand in the region [5]. - Liuzhou is enhancing the integration of artificial intelligence with manufacturing through various initiatives, including the release of 39 AI application scenarios, promoting the practical application of AI technology in various industries [5].

Investment Rating - The investment rating for the company is "Buy" with a target price not specified [6][17]. Core Views - The company reported a stable performance in its H1 2025 results, achieving revenue of 18.181 billion yuan, a year-on-year increase of 13.21%, with a net profit of 1.23 billion yuan, up 25.05% year-on-year [1][5]. - The company aims to achieve a revenue target of 60 billion yuan by 2030, with international revenue accounting for over 60% and a net profit margin of no less than 8% [4]. Financial Performance Summary - In H1 2025, the company achieved a gross margin of 22.32%, a slight increase of 0.22 percentage points, while the net profit margin was 6.34%, up 0.01 percentage points [1]. - The company’s domestic revenue was 9.658 billion yuan, increasing by 15.69%, while international revenue reached 8.523 billion yuan, up 10.52% [1]. - The company’s net profit forecast for 2025-2027 is adjusted to 1.7 billion, 2.36 billion, and 3.31 billion yuan, representing year-on-year growth rates of 28.4%, 38.7%, and 39.9% respectively [5]. Business Segment Performance - The engineering machinery segment showed solid growth, with loader sales revenue increasing by over 20% year-on-year, and excavator sales revenue up by 25% [2][3]. - The company’s international business experienced counter-cyclical growth, with sales volume growth significantly exceeding the industry average, and the market share of earth-moving machinery products increased by 1 percentage point [3]. Strategic Development - The company is accelerating its globalization efforts, with over 400 overseas distributors and more than 1,300 service points established [3]. - The company has approved investments of 500 million yuan in Indonesia for a manufacturing plant and 150 million reais in Brazil for a financing leasing company [3][4].

Group 1 - Recently, Zhongheng Rui'an (Beijing) Asset Management Co., Ltd. was established, with Wei Mingwei as the legal representative [1] - The company's business scope includes asset management services using self-owned funds, engaging in investment activities with self-owned funds, and leasing construction machinery and equipment [1] - The company is wholly owned by Liugong [1]

Macro Strategy - The core viewpoint highlights the unprecedented removal of Federal Reserve Governor Cook by Trump, raising concerns about the independence of the Federal Reserve and the potential for more "Trump-aligned" appointees, which could lead to increased expectations for interest rate cuts in the future [1] - Following the removal announcement, market reactions included rising long-term U.S. Treasury yields and gold prices, while the U.S. dollar index declined, indicating a shift in investor sentiment towards risk assets [1] Fixed Income - The report indicates a cautious approach in the convertible bond market, suggesting a reduction in exposure to high-priced targets while increasing allocations to ETFs to balance risks [2][3] - The 10-year government bond yield increased from 1.745% to 1.785%, reflecting market adjustments to macroeconomic conditions [2] Industry Insights - New Lai Ying Material (300260) reported improved Q2 performance, benefiting from growth in the semiconductor and liquid cooling sectors, with a focus on domestic substitution and an optimized customer structure [5][6] - Li Yuan Heng (688499) achieved profitability with a robust order backlog in solid-state battery equipment, indicating a strong operational cash flow and successful delivery to major clients [7] - Jin Zai Food (003000) is experiencing a Q2 adjustment period, leading to a downward revision of profit forecasts for 2025-2027, reflecting a mismatch between internal expansion strategies and external market conditions [8][9] - Anpei Long (301413) reported steady growth in its temperature and pressure sensor business while investing in humanoid robotics, adjusting profit forecasts for 2025-2026 [10] - Xinde New Materials (301349) is seeing significant growth in fast-charging products, with profit forecasts adjusted upwards due to improved margins [11] - The report on China National Railway (601766) indicates strong growth in H1 2025, driven by recovery in railway fixed asset investments [18] - The report on China Duty Free Group (601888) highlights a narrowing revenue decline in Q2 2025, with a focus on expanding city store operations to boost sales [31] - Yun Aluminum (000807) reported a 17.98% increase in revenue for H1 2025, with a focus on maintaining high profit margins amid fluctuating aluminum prices [32][33]

Core Viewpoint - LiuGong (000528) reported strong financial performance for the first half of 2025, with significant increases in revenue and net profit, driven by domestic demand and strategic initiatives in both domestic and international markets [1][4]. Financial Performance - Total revenue for the first half of 2025 reached 18.181 billion yuan, a year-on-year increase of 13.21% [1]. - Net profit attributable to shareholders was 1.23 billion yuan, up 25.05% year-on-year [1]. - In Q2 2025, total revenue was 9.032 billion yuan, reflecting an 11.22% increase compared to the same quarter last year [1]. - The gross margin improved to 22.32%, a 1.0% increase year-on-year, while the net margin slightly increased to 6.34% [1]. - The company reported a significant increase in accounts receivable, which reached 12.877 billion yuan, a 24.25% increase year-on-year [1]. Market and Business Outlook - The domestic market for earth-moving machinery is expected to continue its growth momentum, with double-digit sales growth anticipated for excavators and loaders throughout the year [5]. - The international market faces challenges due to global trade protectionism, but there is optimism for gradual recovery in 2026, particularly in emerging markets [5]. - LiuGong's strategy focuses on comprehensive solutions, smart technology, and international expansion, with positive growth reported in both domestic and international business segments [4][5]. Strategic Initiatives - The company is enhancing its sales and channel networks in key European markets and is committed to improving its brand influence through ESG initiatives and product innovation [6][7]. - LiuGong's management emphasizes the importance of a market-oriented compensation system and performance plans to strengthen the execution capabilities of management and core employees [6]. Industry Context - The domestic electric loader market is experiencing increased price competition, with LiuGong maintaining a competitive edge through technological leadership and brand advantages [7]. - The company advocates for healthy competition within the industry, focusing on innovation and product quality as key drivers for sustainable development [7].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 16.00 [7][5]. Core Views - The company reported a revenue of RMB 181.81 billion for H1 2025, representing a year-over-year increase of 13.21%, and a net profit of RMB 12.30 billion, up 25.05% year-over-year [1][5]. - The company's performance is attributed to the successful implementation of state-owned enterprise reforms and a recovery in the industry, which is expected to continue driving revenue and profit margin growth [1][5]. Summary by Sections Financial Performance - In Q2 2025, the company achieved a revenue of RMB 90.32 billion, a year-over-year increase of 11.22%, but a quarter-over-quarter decrease of 1.28%. The net profit for Q2 was RMB 5.73 billion, up 17.94% year-over-year but down 12.85% quarter-over-quarter [1][2]. - The gross margin for H1 2025 was 22.32%, a decrease of 1.08 percentage points year-over-year, while the net margin slightly increased to 6.34%, reflecting stable operations [2]. Business Segments - The excavator segment saw a sales revenue increase of 25.1% year-over-year, with domestic sales up 31.0%, leading to a market share increase of 1.6 percentage points. The overseas sales also grew by 22.1% [3]. - The loader segment also performed well, with both domestic and international sales revenue exceeding 20% year-over-year growth. The electric loader sales surged by 193.0%, capturing over 50% of the industry’s electric loader export market [3]. Market Outlook - The domestic excavator market is recovering, with sales of 65,637 units in H1 2025, a year-over-year increase of 22.89%. The demand for small excavators in agriculture and municipal projects is strong, supported by environmental policies [4]. - The overseas market is also showing recovery, with significant growth in emerging markets such as South Asia and the Middle East, where growth rates can reach over 80% [4]. Profit Forecast and Valuation - The company’s projected net profits for 2025, 2026, and 2027 are RMB 19.61 billion, RMB 23.91 billion, and RMB 29.07 billion, respectively, with corresponding EPS of RMB 0.97, RMB 1.18, and RMB 1.43 [5][11]. - The report assigns a PE ratio of 16.5 for 2025, reflecting the company's strong growth prospects and the positive impact of state-owned enterprise reforms [5].

Core Viewpoint - Dongwu Securities report indicates that LiuGong's net profit attributable to shareholders in the first half of the year increased by 25% year-on-year, aligning with expectations, with a target to achieve 60 billion yuan in revenue by 2030 [1] Product Performance - Loaders: In the first half of 2025, domestic and international revenue both increased by 20% year-on-year, with global sales of electric loaders rising by 193% [1] - Excavators: In the first half of 2025, sales revenue increased by 25% year-on-year, with domestic terminal sales up by 31%, increasing market share by 1.6 percentage points, and overseas terminal sales up by 22%, increasing market share by 0.5 percentage points, resulting in a significant net profit growth of 90% [1] Profit Forecast Adjustments - Due to pressure from demand in specific overseas regions, the company’s net profit forecasts for 2025-2027 have been revised down to 1.85 billion, 2.76 billion, and 3.55 billion yuan respectively, from previous estimates of 2.07 billion, 2.89 billion, and 3.79 billion yuan [1] - The current market capitalization corresponds to price-to-earnings ratios of 12x, 8x, and 6x for the years 2025, 2026, and 2027 respectively, maintaining a "buy" rating [1]

Core Viewpoint - The company aims to achieve a revenue of 60 billion yuan by 2030, with international revenue accounting for over 60% and a net profit margin of no less than 8% [1] Strategic Planning - The company's 14th Five-Year Plan targets a compound annual growth rate (CAGR) of 12% for revenue and 24% for net profit from 2024 to 2030, based on 2024 figures [1] - Three core growth engines identified are: 1. Core business in earthmoving machinery 2. Growth businesses in mining machinery, industrial vehicles, and prestressed technology 3. Emerging businesses in agricultural machinery, new technologies, and industrial finance [1] Global Expansion Initiatives - The company approved an investment of 500 million yuan to establish a manufacturing plant in Indonesia, enhancing local manufacturing capabilities and global supply chain [2] - A proposal to set up a wholly-owned subsidiary in Brazil with a registered capital of 150 million reais (approximately 19.4 million yuan) was also approved, aimed at establishing a financing leasing company [3] - The company plans to invest 77.15 million yuan in the second phase of its Wuxi road machinery factory project, funded by its own resources [4] Industry Insights - The engineering machinery industry is showing signs of recovery, with expectations of improved performance and demand [6] - The industry is transitioning to "National IV" emission standards starting December 1, indicating regulatory changes that may impact operations [6] - Domestic sales have been declining for 13 consecutive months, while exports surged over 70%, highlighting a shift in market dynamics [6]