Xu Gong Group Chairman and Secretary of the Party Committee Wang Min

In the first half of this year, XCMG sold more than 70 tons of large mining excavators over last year, ranking first in the domestic market with a share of nearly 50% and acquiring an overseas list that could change the competitive landscape of the world mining machinery industry. Large-scale mining excavators with more than 100 tons and larger mine dump trucks are the only domestic brands for complete sets of mining machinery; they are continuously acquired in numerous “One Belt and One Road” national super engineering projects in the world’s largest refinery project, the Dangote refinery project in Nigeria. With major orders, Xugong’s total export volume increased by 90% year-on-year and ranked first in the domestic industry.

In the first half of this year, XCMG’s operating income was RMB 52.1 billion, which was an increase of 48% year-on-year; total profit increased by more than two times year-on-year.

These achievements have not been easy for Xugong, which was still in the midst of a steep decline in the industry during the last five consecutive years. The key is that we have devoted great strenuous efforts to hard work and transformation, and we have made a Chinese manufacturing. In the 2025 journey, the supply-side structural reforms that are necessary, necessary, and must be tackled are vital:

First, we will unswervingly implement XGMG’s “Technology Leading, Do-it-Your-Do Not Destroy” Action Gold Standard. The general manager of our hydraulics company recently went to Australia's Rio Tinto mining area. After seeing Xugong’s performance of hydraulic cylinders, he said: “This is what we truly understand as a technology leader and is not destroyed. In the wild mountainous wilderness with a few hundred kilometers of unmanned smoke and extreme conditions of high temperature and drought, large excavators continue to operate for more than 20 hours each day. If the cylinder fails, the loss to the customer is incalculable and cannot be truly destroyed. The maximum working time of XCMG cylinders reached 8,671 hours, far exceeding the 5000 hours required by customers, and ranked among the world's top products in this field. The construction machinery emphasizes advanced nature and non-destructive use, and cannot achieve breakthroughs in high reliability. It will always be in the low-end and low-level. The key to making China's strategic goal of manufacturing 2025 is to fully implement the XCMG Action Gold Standard of “Leading Technology, Do Not Disturb”, which will greatly increase economic efficiency and occupy the global competition commanding heights.

Second, we must remain steadfast in our ambitions and strive to break through the key issues. In addition to the joint efforts of the power system and the technology alliance, the four major systems have all been independently and autonomously deployed in the five major construction machinery key parts systems such as power, hydraulics, transmission, intelligent control, and walking. One of Xugong’s three overseas R&D centers The top priority of the German R&D center is the basic heavy lifting. Taking the high-end hydraulic valve with the highest technical difficulty in the hydraulic system as an example, the number of hydraulic excavator valves that we have achieved on the basis of the acquisition of two hydraulic components companies in Germany and the Netherlands will exceed 1,000 units and 70 tons. Complete replacement of the 110-ton crane main valve with localization and a 42% reduction in the price of the main valve of a certain brand in Switzerland. XCMG’s AMAC hydraulic valve company in China has already landed in Xuzhou, accelerating the localization of high-end hydraulic valves. For production capacity.

Third, we will unwaveringly move toward the international market stage. At the beginning of this year, the Philippine President Duterte’s interview with my party made us strongly touch the strong pulse of the Southeast Asian market. In this market we heavily invested, sales doubled in the first half of the year. In the previous year, the Southeast Asian country that had a blank market had obtained direct sales of the excavator. Hundreds of breakthroughs; our first position in exports from Africa and the Middle East is more stable. At this time, more than 200 XCMG equipment are under construction at the construction site of the 2022 Qatar Football World Cup main stadium; we have established a joint venture in Central Asia Uzbekistan. The factory makes nearly all the XCMG equipment used in major engineering construction in the country; the US$350 million construction of a Brazilian factory makes XCMG one of the three major construction machinery brands in the country. The Xugong team of hundreds of people has a tenet. Don't take the South American market and swear that they will not return home; our Schweining company in Germany is the first brand of concrete machinery in European and American developed markets. This company has five manufacturing bases in the world; we are in the United States and India are planning to build a new KD plant, making Xugong The number of global KD factories reached 10; our layout this year Eight overseas spare parts Spares promote export growth during the first half three times, after a large number of 80, after 90 foreign experts and international talents from the world is that we introduce a new blueprint for support from XCMG global market development.

Fourth, we will unswervingly break through smart manufacturing and smart connected devices. Now, a basic and original technology R&D team invested by Xugong is trying to control unmanned construction machinery technology day and night. If we can seize this historic opportunity, XCMG will win the leading position in high-end construction machinery technology from the world; Xugong Information Technology Co., Ltd., which started with the software system supporting business, has grown to be the largest IT company in the Huaihai Economic Zone and will be listed on the New Third Board this year. The newly-built XCMG cross-border e-commerce company will break 100 million yuan in revenue this year, focusing on pioneering the “Three High Ones”. Large-scale overseas direct sales of high-end consoles; Xugong Zhilian Logistics Co., Ltd., a newly-built company, has also begun its global deployment; Xugong and Alibaba Cloud have created an industry-first industrial cloud platform that manages the overall operating rate of more than 400,000 Xugong equipment. Operational data, remote operation and maintenance diagnostic information, etc. The accumulated big data provides an important index for national economic forecasts. XCMG's smart manufacturing has become a benchmarking company recognized by the Ministry of Industry and Information Technology, and smart interconnected equipment is turning into a new customer value by automating the management of equipment efficiency, optimizing the construction process plan, and intelligentizing fault prediction alarms. After Lu Xuxiang's inspection of Xugong, he highly evaluated: “XCMG's smart manufacturing not only leads the industry, but also belongs to the leading position of the first echelon in China.”

Fifth, we will steadfastly cultivate a group of industry champions and invisible champions. XCMG started from the three traditional mainframes of cranes, loaders, and rollers. Over the past ten years, it has rapidly developed new types of excavators, concrete machinery, piling machinery, heavy trucks, and environmental industries. There are six major types of construction machinery in the eight sectors. The status of its main business is unshakeable. There are already four major categories of the six major categories of construction machinery that have achieved one of the highest number of industries in the world; heavy trucks and environmental industries are within the troika of XCMG's “Twelfth Five-year Plan”. All of them have doubled their growth, and they have spent 10 billion years to achieve a separate listing. The listed company Xugong Machinery, which we often care about, is only part of XCMG. XCMG still has a considerable portion of its high-quality assets under the parent company XCMG, which will now be incorporated into listed companies such as XCMG excavators, Schweinge, and XCMG tower cranes. Xugong Mining Machinery is a large plate that has begun to show dew in recent years. It will be the ninth heavyweight plate of XCMG. The world giants Caterpillar and Komatsu each have a sales scale of more than ten billion US dollars each year. The world's giants all regard Xugong as the most important opponent of Chinese brands. Xugong Mining Machinery will work hard to build a new listing platform and become the mainstream competition in the world's mining machinery industry in the same way as XCMG and Xugong Heavy Truck and Xugong. By.

Xugong Machinery also has a number of new stealth championships that are being hatched. This includes the discrete growth of Xugong’s fire-fighting equipment last year, which includes sets of shield machines, tunnel boring machines, rigs, and undercuts. Underground space construction equipment, both of which have initially reached a scale of about 500 million; our aerial work platforms, aerial vehicles, and road maintenance machinery have all reached a scale of over 100 million, and port machinery, energy, and water conservancy drilling rigs are also accelerating. growing up. Military equipment is another key area for XCMG's key development. XCMG has 1 billion military construction machinery installed in the PLA's military every year. It is fully involved in the military main battle support equipment and explores military main battle equipment, focusing on high-mobility military engineering. Seek breakthroughs in the fields of equipment, military vehicles and unmanned equipment. The XCMG brand's big platform is strong enough to fully nurture and carry industry champions and invisible champions that make dozens of equipment to create market segments.

Sixth, we will unswervingly build the wisdom of the world and the XCMG general culture. The equipment industry must not be impetuous, it must not be eager for quick success, it must have the accumulation of technology, must have the formation and development of culture, there must be a gathering of talents and innovation, must aim at the goal unshakeable, or China can not become a manufacturing powerhouse. Xugong, a local state-owned enterprise that can become a national team for equipment manufacturing, is well-known in the world industry, not only because we have the widest range of engineering machinery product lines and complete sets of construction equipment, technologies, and services, but also because we have a Professional and dedicated team of skilled workers and engineers. Among the 22,000 XCMG employees, there are not only 6,000 R&D, technicians and technicians, but also 18 chief technicians in Jiangsu Province, 136 senior technicians, 923 technicians, and 4357 senior workers. Senior workers and above are among skilled workers. The proportion is more than 50%, among which 6 advanced workers represented by the National Model Workers have emerged; and overseas high-end elites have been introduced using global manufacturing, R&D bases, and there are already more than 3,000 foreign employees.

The biggest difference between XCMG and other companies is that it has a good corporate culture and has created a unique spirit of XMGG with courage and tenacity. It takes the responsibility of serving as the core value, and the strictness, practicality, advancement, and innovation as the corporate spirit. The Xugong Vendor Culture has infected and influenced several generations of people at the spiritual level, and has created a benign industrial eco-environment. It is precisely with such excellent corporate culture heritage that our elite elite talents have not left Xugong under the high-paying temptation of peers. This highlights the strong cohesiveness and infinite positive energy of Xugong's brand and culture. All of them are the solidest foundation for XCMG to achieve quality, profitability, scale, sustainable “three-in-one” growth and build a world-class longevity enterprise in the next five years and ten years.

Xu Gong set a goal: When it comes to manufacturing China's 2025 strategy, it must go to the top three of the world's construction machinery industry and enter the world luxury club of construction machinery. This is also the pursuit of all Chinese equipment manufacturers. After decades of hard work and development, XCMG has been a few hundred meters away from the peak of the world's construction machinery, and has a strong strength and foundation. It is fully responsible for the impact of the peak and is fully capable of achieving this step by step through our solid efforts. aims. As long as we are struggling hard and moving forward with determination, we are firmly committed to climbing. I firmly believe that XCMG will be able to achieve the goals of the world's high-end equipment manufacturing Everest and will surely contribute a strong world-class corporate brand for the country!