20/10/2022
Media Focus | CIMC Vehicles: Overseas Business Grew Significantly at 59.2% for 1H2022, “Light Tower Manufacturing Network” Opened up a New Growth Channel
Finet: On 25 August, CIMC Vehicles (Stock code: 301039.SZ/01839.HK), the world’s leading high-end semi-trailers and specialty vehicles manufacturer, announced its interim results.
Six Major Businesses or Groups Achieved the Linkage between Production and Sales with Remarkable Results of Overseas Business
According to the Group’s Interim Report 2022, the Light Tower Pioneer Business reflected its resilience ahead of the industry and recorded a revenue of RMB 2,327 million in the first half of the year. In addition, the existing life cycle management service model and development prospects of the Light Tower Pioneer Business are highly favored by the capital market. Its “Vanguard Trailer Rental” company successfully completed the A round of financing in the first half of the year.
Champion Tanker Business Group also achieved a solid performance. Despite the market downturn in the first half of the year, Champion Tanker Business Group turned challenges into opportunities, actively implemented the guiding strategy of “carbon peaking and carbon neutrality”, drove the increase in the sales of new energy concrete mixer trucks, achieving a revenue of RMB 2,142 million. Even more encouraging was that CIMC Vehicles, by capitalizing on the advantages of “Light Tower Manufacturing Network”, brought into play the synergistic advantages of the three major production bases, and was continuously and deeply engaged in the market segments. With the extension of the industrial chain and the integration of upstream and downstream resource advantages, the gross profit margin increased by 0.8 percentage points year-on-year.
In face of the severe market environment in the first half of the year, the two main businesses, the Urban Dump Truck Business and the TB Business Group, gave priorities to high-quality development. By relying on their own technological advantages and leading position in the market, they advanced in depth with innovation-driven products, as well as actively explored and developed new energy products jointly with tractor manufacturers to achieve good results of both revenue and product innovation, while seeking more incremental opportunities and market share. In the first half of 2022, the TB Group and the Urban Dump Truck Business recorded a revenue of RMB 131 million and RMB 479 million, respectively.
In the first half of 2022, as the overseas markets tended to adopt regular control of the pandemic, the Company actively captured the opportunity of business growth, and achieved an increase in the sales and prices and a new high of revenue due to CIMC Vehicles’ Sophisticated Manufacturing System Network and Intercontinental Operation, which generated advantages including global resource integration and global supply chain control.
According to the interim report, in the first half of 2022, the Company’s North American Business performed brilliantly, with an increase in the sales and prices of its three main products, which led to the revenue increasing by 151.6% to RMB4,629 million and the gross profit margin increasing by 4.0 percentage points year-on-year. It hit new highs in revenue. In specific, in the first half of 2022, the revenue of refrigerated trailers of the Company in North America increased significantly by 189.4% year-on-year, and the gross profit margin increased by 3.0 percentage points year-on-year. According to CIMC Vehicles, by capitalizing on the established a Sophisticated Manufacturing System Network, North American Business has formed a flexible, reliable, low-cost and close-distance product delivery network, and actively met the product delivery needs of North American customers.
In terms of European Business, in the first half of 2022, CIMC Vehicles further improved and upgraded the construction of the Sophisticated Manufacturing System for the localized “Light Tower” Plant of LAG and SDC subsidiaries, significantly enhanced production efficiency and capacity, and further improved product competitiveness. During the Reporting period, the Company’s European business strategy plan has shown results, with revenue increasing by 14.1% to RMB 1,272.0 million, achieving quality growth.
Light Tower Manufacturing Network has Obvious Competitive Advantages, and the Company Ushers Future Growth in Overseas Business
In the “Light Tower Manufacturing Network” model, the underlying architecture consists of LTP, LTS, LoP and LoM, which forms a complete pyramid and provides a new direction for the Company’s organizational development, securing of orders and delivery services. Meanwhile, the customer relationship management (CRM) system and EPS digital supply chain platform are utilized in the whole process, which improves the degree of adhesion and coordination of modules, finally forms an efficient operation organization and process and determines the competitive advantage by improving production efficiency, product gross profit rate and market share.
In the first half of 2022, as overseas logistics, transportation and semi-trailer markets emerged from the pandemic and began to fully recover, the North American semi-trailer market was in short supply. Capitalizing on the advantage of intercontinental operation, the Company actively implemented the strategic measures of North American Business, gave play to the advantages of global resource integration, controlled the global logistics and distribution costs through centralized purchase and digital management of the global supply chain, and optimized the arrangements for local production and manufacturing, and actively captured the business growth opportunities, and overcame the impact of the “big traffic jam” in the global supply chain. The strategic measures were proven for the linkage between production and sales and the economic efficiency, which were evident from the new highs in the revenue of the North American business in the first half of the year.
CIMC Vehicles is confident about its overseas business performance in the second half of the year. The Company will continuously build the Sophisticated Manufacturing System to promote high-quality development, actively deepen its strategic arrangements for the six major businesses or groups, and further increase its market segment share in China through production and marketing coordination, so that overseas semi-trailers will have competitive advantages in North American, European and emerging markets, thus further enhancing its leading position in the world.
Domestic Business is Expected to Recover In the Second Half of the Year and the Global Leading Position will be Further Strengthened
Compared with the first half of the year, the epidemic has been effectively being controlled in the second half. There have been sustained implementation of growth stabilization policies, the accelerated implementation of infrastructure projects and the orderly recovery of supply chain and logistics transportation. Meanwhile, international oil, commodities and raw materials prices are gradually decreasing.
In the second half of 2022, favored by the various positive factors, the domestic economy has been recovering steadily, and the profits of downstream manufacturing enterprises are expected to improve. In the meantime, CIMC Vehicles, which integrates advantages of intercontinental operation, global market leadership, high-end manufacturing, R&D technology, new retail model and "Light Tower Manufacturing Network", possesses the most remarkable ability to recover the results and achieve higher quality growth.
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