Analysis of Capacity Utilization at XCMG Machinery's Singapore Base and Its Overseas Expansion Strategy

Indicator	Data	Explanation
Capacity Utilization Rate of Singapore Base	Approx. 59-60%	Below the 60% break-even threshold
Overseas Revenue (2024)	RMB 41.687 billion	YoY +12%
Proportion of Overseas Revenue (H1 2025)	46.6%	Just one step away from the 50% target
CAGR of Overseas Revenue (2018-2024)	38.5%	High-speed growth
Overseas Manufacturing Bases	11	Covering major global regions

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According to China Chengxin International’s 2025 annual tracking rating report, the capacity utilization rate of some product lines of XCMG Machinery is indeed at a low level. The capacity utilization rate of the Singapore manufacturing base is approximately

, which is below the 60% break-even threshold generally recognized in the manufacturing industry [1].

Product Category	Designed Capacity	Actual Output	Capacity Utilization Rate
Aerial Work Platforms	50,000 units	28,184 units	56.37%
Loaders	30,000 units	23,806 units	79.35%
Road Machinery	12,348 units	8,030 units	65.03%
Hoisting Machinery	3,600 units	1,805 units	50.14%
Piling Machinery	3,600 units	1,756 units	50.14%

• The global construction machinery industry entered a downward cycle in the second half of 2023
• Overseas market demand continued to decline, and export growth slowed in 2024
• According to Off-Highway, an authoritative international construction machinery consulting firm, the overseas market is expected to return to growth in 2026 [2]

• The Singapore base mainly covers the Southeast Asian market and is an important fulcrum of the company’s global layout
• Capacity construction is a
  forward-looking layout
  that needs to reserve space for future demand growth
• Similar to the logic of “build roads first to get rich”, manufacturing expansion requires capacity to be in place first

• The Southeast Asian market is greatly affected by the global economic cycle
• Changes in the policy environment of some emerging markets affect the pace of demand release

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From the perspective of revenue growth, XCMG Machinery’s overseas expansion indeed shows an

:

• Overseas revenue increased from RMB 5.894 billion in 2018 to RMB 41.687 billion in 2024
• The 6-year compound annual growth rate (CAGR) reached 38.5%
  , far exceeding the industry average
• The proportion of overseas revenue increased from 9.5% to 46.6% in H1 2025, approaching the 50% target [3]

Region	Number of Bases	Key Bases	Strategic Positioning
Southeast Asia	3	Singapore, Malaysia, Indonesia	Core Market, Service Hub
Central Asia	2	Uzbekistan, Kazakhstan	Along the Belt and Road Initiative
South America	2	Brazil, Argentina	Emerging Growth Pole
Europe	1	Germany	High-End R&D
North America	1	United States	High-End Market Breakthrough
Africa	1	South Africa	Resource Development Market
Middle East	1	Saudi Arabia, United Arab Emirates	Infrastructure Market

Compared with competitors such as Sany Heavy Industry and Zoomlion Heavy Industry, XCMG Machinery’s overseas capacity layout is at a

and is not the most aggressive.

The

:

• The Belt and Road Initiative contributes up to 33% of profits
  : Southeast Asia, Africa, Latin America and other regions are the main profit sources for medium and large excavator exports [4]
• Profit exposure in the US is only 0.67%
  : Affected by tariffs and market competition, profit margins in European and American markets are low, and the company proactively controls exposure
• Aftermarket services grew by 33%
  : Extend the industrial chain and enhance customer full-life-cycle value
• High-end product revenue grew by 41%
  : Focus on products with high technological content and strong profitability

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Dimension	Indicator	Evaluation
Revenue Growth	38.5% CAGR	Aggressive
Base Expansion	11 Overseas Bases	Moderate
Channel Construction	300+ Dealers, 2000+ Service Outlets	Aggressive
R&D Investment	Invest over 5% of revenue in R&D	Rational

1. Market Demand Support
   : In 2024, China’s exports of construction machinery to Belt and Road regions reached USD 33.3 billion, YoY +14%, contributing the vast majority of growth [4]

2. Policy Dividend Support
   : The Belt and Road Initiative continues to deepen, and infrastructure investment in Southeast Asia, Africa and other regions is accelerating

3. Technical Capability Support
   : XCMG invests over 5% of its revenue in R&D each year, owns more than 12,000 patents, and has technical leading advantages

4. Systematic Capability Support
   : Has
   systematic overseas expansion capabilities
   in manufacturing, marketing, after-sales service, finance, risk control, etc.

• Aggressiveness is reflected in
  : Fast revenue growth, rapid channel expansion, and wide global coverage
• Rationality is reflected in
  : Focus on high-margin regions, control exposure to the US, and emphasize aftermarket services

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Risk Type	Specific Performance	Impact Level
Capacity Utilization Risk	Singapore base at approx. 60%, below break-even threshold	Medium-term
Trade Friction Risk	Uncertainty in US tariff policies	High
Exchange Rate Fluctuation Risk	Increasing proportion of overseas revenue leads to higher exchange rate sensitivity	Medium-term
Credit Sales Risk	Balance of finance lease repurchase obligations is RMB 39.1 billion	Medium-term
Geopolitical Risk	Changes in policy environment in some regions	Low

• Industry Inflection Point Approaching
  : The European market has slightly recovered in Q2 2025, and the overseas market is expected to return to growth in 2026
• New Energy Advantages
  : The competitiveness of electrified products continues to improve, and the aftermarket space is vast
• SOE Reform Dividends
  : Optimized governance structure and improved operational efficiency

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1. Capacity utilization below 60% is an industry-wide issue
   , not a dilemma unique to XCMG
2. Overseas expansion strategy is clear
   : Focus on high-margin markets along the Belt and Road Initiative, rather than blindly pursuing scale
3. Medium-to-long-term growth is confirmed
   : The proportion of overseas revenue reached 46.6% in H1 2025, just one step away from the 50% target

• Pace of demand recovery in overseas markets
• Penetration rate improvement of new energy products
• Growth of aftermarket service revenue
• Risk control of finance lease business

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[1] China Chengxin International Credit Rating Co., Ltd. “2025 Annual Tracking Rating Report for Xuzhou Construction Machinery Group Co., Ltd.” (June 2025). http://static.sse.com.cn/disclosure/bond/announcement/corporate/c/new/2025-06-24/184576_20250624_ULMD.pdf

[2] Soochow Securities. “Special Topic on Overseas Capacity Layout of Construction Machinery: Improving Overseas Capacity to Reduce Tariff Risks” (May 2025). https://pdf.dfcfw.com/pdf/H3_AP202505251678899483_1.pdf

[3] Yahoo Finance. “XCMG Reports Record-Breaking Half-Year Results” (September 2025). https://sg.finance.yahoo.com/news/xcmg-reports-record-breaking-half-065800435.html

[4] Huaan Securities. “SOE Reform Unleashes New Energy, Dual Growth from Emerging Businesses + Overseas Expansion” (October 2024). https://pdf.dfcfw.com/pdf/H3_AP202410061640176876_1.pdf

[5] Industrial Securities. “SOE Reform and Intelligent Reform Unleash Vitality, New Cycle Welcomes Valuation Repricing” (July 2025). https://pdf.dfcfw.com/pdf/H3_AP202507281717136940_1.pdf