Breaking Down SINOMACH HEAVY EQUIPMENT GROUP CO.,LTD Financial Health: Key Insights for Investors

Born in 2011 as a wholly owned arm of Fortune Global 500 parent SINOMACH, SINOMACH Heavy Equipment Group Co., Ltd. has stitched together legacy assets like the Tianjin Construction Machinery Research Institute and Luoyang Construction Machinery Factory to become a national flagship in heavy equipment with nearly 300 pioneering products, 1,700+ authorized patents and more than 400 scientific awards; leveraging SINOMACH's scale (over 120,000 employees, 11 listed firms and 350+ overseas service agencies across 100+ countries) the company runs four major production bases (Tianjin, Changzhou, Luoyang, Luzhou), global joint ventures with Hyundai, Komatsu and Terex, and an R&D hub focused on energy‑saving, remanufacturing and intelligent engineering machinery-supplying nearly 3 million tons of major equipment to national projects while monetizing through manufacturing and sales of wheel loaders, excavators, graders and forklifts, project contracting and trading, a direct sales force that delivers approximately 45% of revenue, and fast‑growing online channels that account for roughly 25% of sales with e‑commerce up ~30% year‑over‑year, all underpinning its drive to "equip the world, create value" through technological, management and business model innovation

SINOMACH HEAVY EQUIPMENT GROUP CO.,LTD (601399.SS): Intro

• Founding year: 2011 (wholly‑owned subsidiary of SINOMACH)
• International operations arm established: 2017 - Sinomach‑HE International Equipment Co., Ltd.
• Core industrial integration: Tianjin Construction Machinery Research Institute, Luoyang Construction Machinery Factory, Sichuan Changjiang Crane

• Nearly 300 pioneering heavy equipment product models developed over six decades of technology accumulation.
• 16 industrial platforms for research and innovation at national, professional, and provincial levels.
• Over 1,700 authorized patents.
• More than 400 national and provincial scientific awards.
• Supplied nearly 3 million tons of major technical equipment for national key projects.

• Integration of legacy domestic manufacturing and research institutes to capture synergies in heavy machinery design, testing and production.
• Focus sectors include construction machinery, cranes, large‑scale components for infrastructure and energy, and equipment for defense‑adjacent applications.
• Export and overseas project development coordinated through the 2017 international subsidiary to expand global sales, project delivery and after‑sales service.

• Consolidation (2011): Unified major manufacturing and research assets under Sinomach‑HE umbrella.
• R&D build‑out: Establishment of 16 research platforms and accumulation of >1,700 patents and >400 awards.
• Internationalization (2017): Creation of Sinomach‑HE International Equipment Co., Ltd. to lead overseas projects and exports.
• National projects: Delivery of nearly 3 million tons of major technical equipment supporting national infrastructure, energy and defense programs.

SINOMACH HEAVY EQUIPMENT GROUP CO.,LTD (601399.SS): History

• Parent ownership: 100% owned by SINOMACH (state-owned enterprise).
• Group scale: SINOMACH employs over 120,000 people and controls 11 listed companies.
• Global reach: the group maintains more than 350 overseas service agencies across 100+ countries and regions.

• Mission: Supply advanced heavy machinery and integrated engineering equipment to domestic and international infrastructure, energy and construction markets while supporting China's industrial export strategy.
• Strategic advantage: Access to SINOMACH's cross-sector capabilities (machinery, energy, transportation, metallurgy, construction, electronics, aeronautics, etc.) for R&D, procurement and project execution.

• Product sales: Manufacture and sell heavy construction and engineering equipment (excavators, cranes, pile drivers, drilling rigs, etc.) to domestic contractors and state projects.
• Project contracting & EPC: Deliver equipment-plus-engineering contracts (turnkey and EPC) for infrastructure, mining and energy projects-margin from equipment sales plus engineering services.
• After-sales & services: Generate recurring revenue from spare parts, maintenance contracts and long-term site support through the group's 350+ overseas service outlets.
• Export & trade: Capture international orders via SINOMACH's global network, leveraging group finance, credit support and bundled financing for overseas projects.

SINOMACH HEAVY EQUIPMENT GROUP CO.,LTD (601399.SS): Ownership Structure

• Mission: 'Equip the world, create value' - advancing construction technology and promoting global progress.
• Strategic focus: build a world‑class, technology‑driven enterprise delivering quality services worldwide.
• Core approaches: technological innovation, management innovation, and business model innovation to optimize resource allocation and rebuild core competencies.
• Business philosophy: cooperate for win‑win innovation and promote harmonious corporate culture.
• Development priorities: high‑quality growth aligned with national strategy, supporting the national economy and public livelihood.
• Values: contribution, innovation, green development, responsibility, and employee well‑being.

• Product sales: core income from manufacturing and selling construction machinery (excavators, road rollers, crushers), OEM components and parts.
• Engineering & contracting: integrated project delivery including equipment supply, installation, and long‑term maintenance for infrastructure and mining projects.
• After‑sales & services: spare parts, repairs, rebuilds, and equipment leasing - higher margin recurring revenue.
• Technology & solutions: digitalization, telematics, and machine‑as‑a‑service pilots to capture lifecycle value and reduce operator costs.
• Export & global markets: selective overseas contracts and localized joint ventures to expand market share outside China.

• Controlling shareholder: state‑owned SINOMACH group (central SOE) - strategic control, industrial coordination, and capital support.
• Listed public float: institutional and retail investors on the Shanghai Stock Exchange (ticker 601399.SS).
• Board and management: SOE governance with mixed independent directors, technical leadership focused on R&D and manufacturing excellence.

• Scale manufacturing reduces unit costs on core machinery lines; standardized platforms improve margins.
• After‑sales service and parts supply offer steady high‑margin revenues and improved customer retention.
• Project contracting delivers lump‑sum and milestone payments but higher working capital needs and cyclical margin volatility.
• R&D and digital solutions aim to lift product premium and enable subscription/telematics monetization.

• Improve gross margin via automation and supply‑chain optimization; target mid‑single digit EPS growth annually.
• Raise service and digital revenue share to reduce cyclicality from equipment sales.
• Expand selective overseas footprint while leveraging SINOMACH group's project pipelines and financing channels.

SINOMACH HEAVY EQUIPMENT GROUP CO.,LTD (601399.SS): Mission and Values

• Production footprint: four major production bases in Tianjin, Changzhou, Luoyang, and Luzhou (Southwest China Production Base), each focused on specific product families and supply-chain integration.
• Joint ventures and technology partnerships: strategic JVs with Hyundai (South Korea), Komatsu (Japan), and Terex (USA) to access advanced designs, components, and global distribution channels.
• R&D focus: the Tianjin Research Institute of Construction Machinery leads company R&D efforts targeting energy-saving technologies, remanufacturing (reman) processes, and intelligent/electrified machinery.
• Sales and distribution: a robust direct-sales force concentrated on construction, mining, and agriculture clients, combined with dealer networks for after-sales and spare parts.
• Marketing and lead generation: active participation in global trade shows and exhibitions to generate sales leads and enhance brand recognition.
• Digital transformation: growing online sales and customer engagement channels - online sales represent a material and increasing portion of total revenue as e-commerce and digital procurement rise.

• Production capacity: combined annual assembly capacity across bases exceeding several tens of thousands of units (excavators, loaders, road machines aggregated).
• Workforce: approximately 12,000 employees across manufacturing, R&D, sales, and services.
• R&D investment: roughly 3%-4% of annual revenue invested in new-energy, intelligent control, and remanufacturing technologies.
• Geographic reach: products and services sold to more than 100 international markets; exports account for a growing share of revenue.
• Digital sales: online channels now account for a meaningful share of orders and lead generation - estimated at around 15%-25% of total sales depending on product line and geography.

• Integrated manufacturing bases enabling scale economies and localized product lines.
• Technology transfer and co-development through JVs with Hyundai, Komatsu, and Terex enhancing product quality and access to global customers.
• Strong R&D focus (Tianjin Research Institute) on energy efficiency, remanufacturing, and intelligent machinery, positioning the company for electrification and digitalization trends.
• Comprehensive sales and service network with emphasis on long-term customer relationships in construction, mining, and agriculture.
• Proactive participation in international trade shows and investment in digital sales platforms to expand market reach.

SINOMACH HEAVY EQUIPMENT GROUP CO.,LTD (601399.SS): How It Works

• Core product lines: wheel loaders, excavators, motor graders, road rollers, bulldozers, forklifts, and allied attachments and components.
• Channels to market: direct sales force, dealer networks, online sales platforms, export teams, and project contracting units.
• Service layer: spare parts, maintenance contracts, operator training, and financing/leasing solutions.

• Manufacturing & product sales - primary revenue from new equipment delivered to construction, mining and agricultural customers.
• Project contracting & trading - supply of complete equipment suites and execution of international infrastructure projects.
• Direct sales force - estimated ~45% of total revenue, focused on large institutional buyers and fleet sales.
• Online commerce - accounts for ~25% of total sales, with e-commerce transactions growing ~30% year-over-year.
• Exports & overseas projects - commercial presence in 100+ countries and regions, contributing a meaningful share of revenue through exports and cross-border contracts.
• Trade shows & exhibitions - strategic marketing and deal-generation channel that drives partnerships and order flow.

• R&D and design centers develop product lines tailored to target markets.
• Manufacturing plants produce machines and components to order and for stock; finished goods are inspected and dispatched to distribution hubs.
• Sales teams (direct and dealer) secure orders; online platform captures smaller orders and aftermarket sales.
• Project contracting teams bundle equipment, installation and services into turnkey bids for infrastructure and international projects.
• Service networks deliver maintenance, parts and training; recurring services generate steady aftermarket revenue and support machine uptime.

• Channel mix - shifting share toward e-commerce (25% of sales) reduces distribution costs and increases transactional velocity.
• Customer concentration - direct sales to large construction/mining fleets account for a significant portion (~45%), so large contract wins materially affect cash flow.
• Export footprint - operations in 100+ countries diversify demand and smooth seasonality in domestic markets.
• Trade shows & brand-building - international exhibitions feed the pipeline for large project wins and dealer agreements.

• Mission Statement, Vision, & Core Values (2026) of SINOMACH HEAVY EQUIPMENT GROUP CO.,LTD.

SINOMACH HEAVY EQUIPMENT GROUP CO.,LTD (601399.SS): How It Makes Money

• Primary revenue drivers: sales of construction machinery (excavators, cranes, compaction equipment), large-scale industrial equipment for power and infrastructure, turnkey EPC (engineering, procurement, construction) projects, and lifecycle aftermarket services (parts, maintenance, retrofits).
• Strategic monetization: technology licensing, joint ventures with global OEMs, and equipment financing/leasing solutions to institutional and government customers.
• Geographic mix: domestic China remains the largest single market; growing international revenue from Southeast Asia, Africa, and Latin America through localized assembly, service centers, and distributor networks.

• Market leadership: recognized domestically as a national flagship with vertical integration across design, machining, assembly and testing for extreme heavy equipment.
• Technology and R&D: sustained investment in advanced manufacturing, digitalization (IoT-enabled equipment), and research partnerships positions the firm to capture higher-margin, high-tech equipment demand.
• Global brand and channels: regular participation in major international trade shows has increased global recognition, supporting distribution agreements and project wins abroad.
• International expansion strategy: targeted growth in Southeast Asia via localized operations and strategic partnerships reduces tariff and logistics barriers and accelerates market share gain.
• Sustainability & compliance: ongoing moves toward energy-efficient products and greener manufacturing processes align with global buyer requirements and improve competitiveness in export markets.

• Product portfolio breadth enabling cross-selling (new machines + aftermarket services).
• Scale manufacturing and supply-chain integration that lower unit costs for large equipment.
• Project contracting and customization capabilities that capture higher-margin turnkey work.
• Localized international operations that accelerate sales and reduce operating friction in key emerging markets.