[Zhongyuan Machinery] CITIC Heavy Industries ( 601608 ) 2025 Annual Report Review: Steady performance growth, initial results of digitalization, intelligence, and internationalization transformation

Report Main Text

CITIC Heavy Industries Discloses 2025 Annual Report: In 2025, the company achieved operating revenue of 8.107 billion yuan, a year-on-year increase of 0.91%; total profit of 403 million yuan, a year-on-year increase of 27.15%. Net profit attributable to shareholders was 375 million yuan, a year-on-year increase of 0.24%.

Steady growth in performance; steady improvement in profitability; significant growth in new energy equipment

In 2025, the company achieved operating revenue of 8.107 billion yuan, a year-on-year increase of 0.91%; total profit of 403 million yuan, a year-on-year increase of 27.15%. Net profit attributable to shareholders of the listed company was 375 million yuan, a year-on-year increase of 0.24%; non-recurring net profit attributable to shareholders was 407 million yuan, a year-on-year increase of 2.36%. The performance grew steadily, and achieving these results under the overall downward pressure of the industry was not easy.

Breakdown by business:

1. Revenue from mining and heavy equipment was 5.039 billion yuan, accounting for 62.15% of the company’s operating revenue, down 9.73% year-on-year. The main reason is that in 2025, downward pressure became prominent in the mining machinery industry; for the full year, the year-on-year growth rates of operating revenue and total profit were negative, at -4.8% and 6.5%, respectively. The company’s annual report revenue decline narrowed more clearly than in the semi-annual report, reflecting that the company still had strong resilience in the industry downturn stage.

2. Revenue from special materials was 1.248 billion yuan, accounting for 15.4% of the company’s operating revenue, down 6.73% year-on-year;

3. Revenue from robotics and intelligent equipment was 862 million yuan, accounting for 10.63% of the company’s operating revenue, down 4.67% year-on-year;

4. Revenue from new energy equipment was 958 million yuan, accounting for 11.829% of the company’s operating revenue, up significantly by 357.49% year-on-year.

The main reasons for the company’s performance growth are that the company made iteration upgrades of existing technology products and market promotion the focus for the period; R&D investment shifted toward application-oriented development, and expenses declined in phases; in addition, some bad debts related to accounts receivable were reversed.

Gross profit margin dipped slightly; expense management was sound

In the 2025 annual report, the company’s gross profit margin was 18.17%, down 4.51 percentage points year-on-year; net profit margin was 4.52%, up 0.1 percentage points year-on-year; non-recurring net profit margin was 5.03%, up 0.08 percentage points year-on-year. Among them, the gross profit margin of the mining and heavy equipment segment was 21.42%, down 2.47 percentage points year-on-year; special materials was 12.98%, down 6.77 percentage points year-on-year; the robotics and intelligent equipment segment was 24.38%, down 0.63 percentage points year-on-year; and new energy equipment was 2.19%, up 3.01 percentage points year-on-year.

The main reasons for the decline in the company’s gross profit margin are: 1) the gross margins of major businesses all fell slightly; 2) changes in revenue composition—new energy equipment, which has a lower gross margin, grew by 357.49%, driving down the average gross profit margin. The main reasons for the improvement in net profit margin are: 1) the company’s expense control was good, and various expenses generally decreased slightly; 2) credit impairment losses had bad-debt reversals.

Build full-process mining solutions; continuously advance internationalization, digitization, and intelligentization strategies to enhance competitiveness

The company is a leading enterprise in China’s mining machinery sector, with strong comprehensive competitiveness in fields such as crushers and mills. Following the implementation path of “building foundations through internal development + expanding outward,” driven by core main equipment and guided by standard enhancement, the company extends the mineral processing industry chain to form full-process green and intelligent mining solutions. It actively expands from being a single-product supplier to a full-process mining solution supplier, greatly expanding the value per product and strengthening overall competitiveness. In 2025, the company’s market share for mining mills and mine hoists remained at the forefront of the industry, and, led by core main equipment, it drove a substantial increase in the equipment integrated and packaged business.

The company’s internationalization strategy was steadily advanced. The company implemented in a solid manner the established strategy of “strengthening overseas market development,” expanding into regions including Europe, Oceania, South America, North America, Africa, Central Asia, and Southeast Asia, achieving full coverage of products and services for the application of batch-produced, large-specification crushing and grinding equipment in overseas mega-mines. The company has become a global leading supplier and service provider of mining equipment. Its products are exported to key global regions such as the Middle East and Central Asia, and in 2025, overseas spare-parts service orders increased by 27% year-on-year.

The company comprehensively advanced digital transformation and intelligent upgrades. The digital lean manufacturing platform was completed, with the online rate of key core production data reaching 100%, and production management efficiency was significantly improved. It completed the development and construction of the “Artificial Intelligence + Advanced Scheduling” and “Artificial Intelligence + Safety Management” systems; production planning and scheduling efficiency increased by 30%, and the high-risk identification and early-warning rate exceeded 90%. It developed and researched integrated set technology for intelligent crushing and grinding equipment for mines, built an AI + smart mine demonstration project, enabled dynamic and precise control of the grinding process, and increased ore handling volume by 15%.

Seize national robot industry policy opportunities; continue to deepen internal capabilities in the robotics business

While strengthening its business in intelligent equipment for coal mines and specialized robots in petrochemical and emergency rescue fields, and vigorously expanding specialized-robot business for non-coal mines and international markets, the company also seized opportunities arising from national robot industry development policy to accelerate the layout of a “4+6+N” robot industry ecosystem.

Several of the company’s specialized robots have achieved application in non-coal mines. Petrochemical inspection robots achieved their first application in Africa and the Middle East. Firefighting robots were successfully sold to Europe, the Middle East, Southeast Asia, and other regions.

The company successfully developed innovative products including a high-speed belt foreign-object sorting robot, an intelligent monitoring robot for special operations, a magnetic inspection robot, a quadruped inspection robot, and a coal bunker inspection robot, among others. Some products achieved first-time set deployment and small-batch promotion. The company’s independently developed “CITIC Micro” operating system and the “CITIC Zhi” controller series achieved breakthroughs, and have been applied in robot products, CNC machine tools, and mining equipment.

Profit forecast and valuation

We forecast that the company’s operating revenue in 2026-2028 will be 9.16 billion, 10.48 billion, and 113.62 billion, respectively; net profit attributable to shareholders will be 4.68 billion, 5.83 billion, and 7.23 billion, respectively. Corresponding PE ratios are 60.1X, 48.25X, and 38.89X. Continue to maintain the company’s “Buy” rating.

Risk warning: 1: The macroeconomic business conditions are worse than expected; 2: The growth rate of fixed-asset investment in the mining industry is lower than expected; 3: Industry demand is worse than expected, and export demand is worse than expected; 4: Raw material prices rise sharply.

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The analysts who sign this report hold the securities analyst practice qualifications granted by the China Securities Industry Association. My post complies with relevant regulatory requirements. Based on a serious and prudent professional attitude, a professional and rigorous research methodology and analytical logic, I independently and objectively prepare this report. This report accurately reflects my research viewpoints; I am responsible for the report’s content and viewpoints, and I guarantee that the information sources in the report are lawful and compliant.

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