**** | Enterprise Internationalization

From the perspective of construction machinery exports in recent years: in 2020, China's construction machinery exports $20.969 billion; In 2021, China's construction machinery exports $34 billion; In 2022, China's construction machinery exports reached 44.302 billion US dollars.

Let's look at the overseas market performance of domestic leading enterprises: In 2022, Zoomlion's overseas revenue was 9.992 billion yuan, an increase of 72.60%, and its proportion in the total revenue increased to 24%; Sany Heavy Industry's overseas revenue was 36.571 billion yuan, an increase of 47.19%, accounting for 45.7% of the total revenue; The overseas income of Xugong Machinery was 27.838 billion yuan, an increase of 50.50% year-on-year, accounting for 29.67% of the total revenue.

From the above data, it can be seen that from 2020 onwards, the annual export amount of China's construction machinery has maintained a substantial growth. The proportion of overseas revenue of leading domestic construction machinery enterprises is also increasing. Combined with the export situation of construction machinery enterprises in the first quarter of 2023, the overseas market is expected to maintain rapid growth this year.

Looking ahead to 2023, we remain confident that growth can still be achieved overseas. According to advanced manufacturing estimates, the overseas construction machinery market size in 2022 is about 500 billion yuan, and the share of domestic brands is only single digits, which means that there is still a lot of room for development.

At present, China's construction machinery exports focus on the "Belt and Road" along the region, and has obtained a high share, but in North America, Europe and other large market penetration is still low, especially in North America, in recent years, China's construction machinery products have been successfully imported into the European and American markets, is expected to copy its route in the domestic and "One Belt and One Road" along the region, to achieve a rapid increase in share

NO.2 | Market Concentration

There are two major trends in the evolution of domestic market competition: domestic capital replaces foreign capital and large enterprises replaces small enterprises.

First of all, the substitution of domestic capital for foreign capital means that in the construction machinery industry, the market share will be more and more concentrated on domestic brands, and domestic brands continue to squeeze the living space of foreign brands. Take the best representative of construction machinery excavator example, in 2010, China's excavator market is still dominated by Japanese, Korean, European and American brands, domestic brands market share is less than 30%. After the evolution of the industry pattern for nearly 13 years, the market share of domestic brands in China's excavator market exceeds 80% in 2022.

The living space of foreign brands in China has been very small, and in recent years, there has been an endless stream of news about foreign investment withdrawing from the Chinese market. In October 2021, John Deere withdrew from the Chinese market, in June 2022, Kobelco officially announced the closure of the Hangzhou factory, and in December, Case announced the end of 2022 to stop the construction machinery and equipment sales business in the Chinese market. These signs show that the substitution of domestic capital for foreign capital has become a major trend in the domestic construction machinery market.

Now let's talk about big business replacing small business. The so-called alternative small business does not mean to
annex or acquire some companies, but to eat their market through market competition and win their customers.

When the trough arrives, the market volume will inevitably shrink, the cake is so big, who eats it is who, then some powerless small factories are more troublesome, if there is a problem in his internal management, or sales strategy can not keep up with the market, it is very dangerous, followed by the industry said that 2023 May enter the cycle to build the bottom stage, But this bottom-building stage is a difficult winter for weak small businesses.

Of course, there are also some small enterprises that can survive by relying on their own product technology and competitive advantages, or because their products belong to a product track different from the main business of large enterprises. However, in general, the current domestic market has formed a highly concentrated competitive pattern.

NO.3 | High Quality of Industry

Looking at the present, China's economic growth has switched from high-speed growth to high-quality growth,
construction machinery as an industry closely related to the macro economy, has also progressed from a period of rapid growth to a period of high-quality development.

This high quality, it can also be said to be high intelligence. It stands for intelligence, digitization and networking. Industry leaders Zoomlion and Sany Heavy Industry have already laid out high-quality development.

As early as 2019, Zoomlion successfully developed a 5G remote control excavator, using the characteristics of 5G high speed, large broadband and low delay to realize remote control of the excavator. In addition, a series of cutting-edge

technologies such as hollow boom technology, carbon fiber concrete pipe, intelligent functions such as human-computer voice interaction, tower crane ETI intelligent control system and so on are numerous, which is very in line with Zoomlion's low-key and pragmatic temperament and the strong R & D strength incubated by scientific research institutes.

In recent years, Sany Group has held the determination and courage of "either turn over or capsize", unswervably promoted the transformation of digital intelligence, relying on the root interconnection industrial Internet operating system, built three types of intelligent scenarios of "intelligent products", "intelligent manufacturing" and "intelligent operation" to reconstruct and drive business development with digital intelligence, and enhance the overall digital intelligence ability and core competitiveness of the enterprise.


 NO.4 | Electrification of Product

Electrification is the development trend of the industry, in the field of passenger cars, the economy and intelligence of electric vehicles has been widely accepted and recognized by the public, and now this trend is spreading to the field of engineering vehicles, especially the acceptance of electric engineering vehicle products in developed countries. The trend of industry electrification opens the ceiling of enterprise growth, and also provides the advantage of lane overtaking for Chinese enterprises.

At present, the profit margin of electric products is much higher than that of traditional internal combustion products, which will drive the revenue profit ceiling of enterprises to continue to rise. In addition, the first mover advantage of domestic head construction machinery enterprises electrification is obvious, related products in developed countries in Europe and the United States are favored, driving China's construction machinery brand effect, the future industry electrification tide after the arrival of the global competition pattern will be reshaped, the domestic leader is expected to leap into the global leader.