Business Review

As the world’s leading manufacturer of sophisticated manufacturing for semi-trailers and specialty vehicles, CMIC Vehicles (Group) Co., Ltd. (“CIMC Vehicles” or the “Group”, Stock code: 301039.SZ/01839.HK), announced today its 2022 Third Quarterly Report.

During the Reporting Period, the revenue of CIMC Vehicles was RMB6,210.61 million, representing a year-on-year increase of 28.0%, showing the stable business with a tendency for improvement. Net profit attributable to shareholders of the Group after deducting non-recurring gains or losses was RMB311.7 million, representing a year-on-year increase of 226.1%.

According to the Group’s 2022 Third Quarterly Report, in the face of the complicated international economic environment, from January to September, 2022, CIMC Vehicles’ revenue amounted to RMB17,406.5 million. The net profit attributable to shareholders of the Company after deducting non-recurring gains or losses amounted to RMB 660.3 million, representing a year-on-year increase of 19.7%; the gross profit margin of the Group increased by 1.55 percentage points year-on-year. The Group sold 112,039 units/sets of various types of vehicles in the world. Specifically, the Group’s revenue from overseas markets amounted to RMB 9,334.3 million, representing a significant year-on-year increase of 81.4%, highlighting CIMC Vehicles’ resilience and advantages of intercontinental operation.

In the first three quarters of 2022, CIMC Vehicles achieved solid results and maintained competitive advantages. The Group’s total assets amounted to RMB 22,424 million, an increase of 3.0% as compared to that at the end of 2021. Net assets amounted to RMB 12,817 million, an increase of 3.5% as compared to that at the end of 2021. Gearing ratio was 42.8%, a 1.6 percentage points decrease compared to that in the first half of 2022. Net cash generated from operating activities amounted to RMB 582.9 million, a year-on-year increase of 441.6%.

As the Chinese government steadily carried out work for economic and social development and continuously implemented a package of policies to stabilize the economy, demand in the domestic logistics market recovered. On the other hand, the global economy was at risk of recession due to factors such as global geopolitical conflicts, the Federal Reserve’s interest rate hikes, high inflation, fluctuations in commodity price and the energy crisis. Opportunities and challenges coexist in overseas markets.

During the Reporting Period, CIMC Vehicles’ Light Tower Pioneer Business and TB Business Group achieved a quarter-on-quarter increase in revenue, and their gross profit margins improved quarter-on-quarter as well. Champion Tanker Business Group accelerated its arrangement for the integration of products and business. North American business continued to grow rapidly in the first half of the year and its gross profit margin further grew quarter-on-quarter. The performance of European Business’s revenue was solid.

For Light Tower Pioneer Business, as the demand for logistics in China recovered, the Business actively promoted the arrangement of "Light Tower Manufacturing Network" and the implementation of Light Tower Production and Light Tower Sourcing, thus fully releasing the production capacity of “Light Tower” Plants. According to the statistics of China Association of Automobile Manufacturers, in 2021, the market share of semi-trailers of CIMC Vehicles in China reached 12.1% and continuously increased, and the Group ranked first in China for consecutive three years.

There was a strong demand in the North American semi-trailer market. From January to September, 2022, North American Business of the Group achieved rapid growth in operation and business, with an increase in the sales and prices of three major products, a significant increase of 130.2% in revenue, a 4.8 percentage points rise in the gross profit margin, and a significant improvement in profitability.

From January to September, 2022, under the guidance of the strategy of intercontinental operation, European Business of CIMC Vehicles grew against the headwinds, with a steady increase of 17.3% in revenue.

Regarding Champion Tanker Business Group, the sales of China’s heavy trucks reached 5.2 thousand units in September, 2022, representing a month-on-month increase of 13%. The year-on-year decline in China's heavy truck sales in the second half of 2022 is expected to narrow significantly. In the first three quarters of 2022, CIMC Vehicles actively developed new energy pure electric cement mixer trucks, and the sales of new energy cement mixer trucks increased significantly by 100% year-on-year.

Urban Dump Truck Business actively carried out joint development strategies with tractor manufacturers, launching innovative new energy products and exploring innovative solutions for customers. From January to September, 2022, the number of new energy urban dump trucks delivered by the Company’s plants located in Xi’an and Baoji increased by 312% year-on-year.

TB Business Group focused on strategic customers and made efforts in the new energy area, launching products including bodies for TB KG hydrogen energy refrigerated trucks. From January to September, 2022, the sales of new energy products of TB Business Group increased by 100%.

In the fourth quarter of 2022, the domestic market of specialty vehicles has been recovering as there are the recovery of the investment of the domestic infrastructure construction market, the implementation of policies to stabilize the economic growth, and policies of phased decrease in truck tolls for toll roads in China. CIMC Vehicles will seek opportunities and breakthroughs in segmented product markets, continue to expand the joint development and marketing of new energy specialty vehicles with tractor manufacturers, seize the opportunities from the development of new energy, so as to increase its market share as well as consolidate and expand its competitive advantages. In terms of overseas markets, the strong demand trend in the North American market is expected to remain. The Group will actively seize the business growth opportunity to consolidate its business performance in the North American market. The European market is facing the challenges of the energy crisis. High energy prices lead to an increase in production costs, and these may have an impact on the stability of the European industrial system. With the advantage of intercontinental operation, the Group will actively cope with the energy and supply chain crisis, so as to achieve high-quality and stable production and delivery.

At present, there is an active transformation of the manufacturing industry of China in terms of digitalization, carbon reduction by greenness. Looking ahead, CIMC Vehicles will continuously make arrangements in new energy, make full use of the “Light Tower Manufacturing Network”, and continuously build the Sophisticated Manufacturing System, so as to promote high-quality development.