# XCMG Construction Machinery (000425.SHE)

Canonical: https://gigainvestors.com/s/000425.SHE

Analysis as of: 2026-10-16T07:35:32.248Z. Financial observations: FY1996–FY2025.

Listing currency: CNY. Reporting currency: CNY.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: CNY 7.03 per share; close as of 2026-10-15.

Estimated value: low CNY 10.14 per share, central CNY 13.72 per share, high CNY 15.82 per share. Buy at or below the central value CNY 13.72 per share. Valuation as of 2026-10-16T07:35:32.248Z; scenarios are not confidence intervals.

Expected annual return: 18.1% at the stated quote. About 18.1% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; CN 10-year bond 1.7% + 4 points).

## Checklist

### understandable: fail

- 3 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 0

- Operating margin variation: 0.39×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.01×

- FY2017: 0.04×

- FY2018: 0.05×

- FY2019: 0.07×

- FY2020: 0.06×

- FY2021: 0.08×

- FY2022: 0.05×

- FY2023: 0.06×

- FY2024: 0.07×

- FY2025: 0.10×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 8.4%

- ROIC, second-lowest year: 4.2%

- Typical minus recent gross margin: -2.5 pp

- Typical gross margin (annual median): 19.4%

- Recent gross margin (lower of latest and 3-year median): 21.9%

- Years with nonpositive capital: 0

- Capital spending / revenue: 3.6%

- ROIC including acquisitions, ten-year median: 8.2%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 0.5%

- FY2017: 4.2%

- FY2018: 7.5%

- FY2019: 13.8%

- FY2020: 15.3%

- FY2021: 19.6%

- FY2022: 7.9%

- FY2023: 8.5%

- FY2024: 8.3%

- FY2025: 12.8%

### economics: pass

- Owner earnings / net income, 5-yr: 0.81×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: CNY 25B

- Net income, five-year total: CNY 30B

- Return on incremental invested capital: 47.2%

- Working capital / revenue, annual change: -3.5 pp

- Working capital / revenue, change between three-year averages: -21.6 pp

- Working capital / revenue, final three-year average: 37.7%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: -0.04×

- FY2023: 0.62×

- FY2024: 1.08×

- FY2025: 1.03×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 4.2% vs 8.5%

- Per-share earnings: 0.03 to 0.51 (three-year endpoint medians)

- five-year and ten-year diluted share growth both above threshold

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 10.4%

- Ordinary dilution, 5-year annual growth: 4.4%

- Market cap gain: CNY 108B

- Cumulative retained earnings: CNY 24B

- Diluted shares, 10-year annual growth: 10.4%

- Diluted shares, 5-year annual growth: 4.4%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 44.1%

- Per-share value change: CNY 0.48

- Per-share value, starting three-year median: CNY 0.03

- Per-share value, ending three-year median: CNY 0.51

- Buybacks concentrated in cheaper years (correlation): 0.30

- Average buyback yield: 2.7%

- Buyback history: 5 years

- Debt-funded buybacks: No

- Acquisition spending: CNY 9.2B

- Cumulative net income, 10 years: CNY 41B

- ROIC, first three-year median: 4.2%

- ROIC, last three-year median: 8.5%

Chart: Earnings per share; fiscal year observations.

- FY2016: CNY 0.03

- FY2017: CNY 0.14

- FY2018: CNY 0.24

- FY2019: CNY 0.43

- FY2020: CNY 0.40

- FY2021: CNY 1.05

- FY2022: CNY 0.36

- FY2023: CNY 0.45

- FY2024: CNY 0.51

- FY2025: CNY 0.57

### accounting: pass

- Sloan accruals: -4.4%

- Receivables to sales index (DSRI): 0.77×

- Restructuring years, last five: 0

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.15×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.18×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -4.6%

- FY2017: -4.3%

- FY2018: -2.1%

- FY2019: -2.0%

- FY2020: 1.0%

- FY2021: -1.9%

- FY2022: 1.6%

- FY2023: 1.1%

- FY2024: 0.2%

- FY2025: -4.4%

## Holders

## Price story

Down 43% since Feb 2026 · sales +10%

Story as of 2026-10-16T10:00:05.491Z; price observation 2026-10-15.

Price needs cash profits to shrink 3.8% a year for ten years

### Sales · FY2024–2025

sales +10%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: CNY 17B 

- FY2017: CNY 29B 

- FY2018: CNY 44B 

- FY2019: CNY 59B 

- FY2020: CNY 74B 

- FY2021: CNY 117B 

- FY2022: CNY 94B 

- FY2023: CNY 93B 

- FY2024: CNY 92B 

- FY2025: CNY 101B 

### Gross margin · FY2025

gross margin 22.6%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 19.1% 

- FY2017: 18.5% 

- FY2018: 16.3% 

- FY2019: 17.3% 

- FY2020: 16.6% 

- FY2021: 21.1% 

- FY2022: 19.7% 

- FY2023: 20.0% 

- FY2024: 21.9% 

- FY2025: 22.6% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in farm & heavy construction machinery; annual sales are CNY 100.8 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); FY2025: revenue 100822903512.12; grossProfit 22794009688.83; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 000425.SHE: XCMG Construction Machinery Co., Ltd. engages in the manufacturing and sale of construction machinery in China. The company offers hoisting machinery, excavators, loaders, road machinery, piling machinery, non-excavation machinery, concrete machinery, special vehicles, aerial working equipment, sanitation machinery, fire-fighting machinery, tunnel machinery, resource exploration machinery, and port machinery. It also exports its products. The company was founded in 1943 and is based in Xuzhou, China.

### Why customers stay

Margins ranged from 20% to 22.6% during 2023–25; it earns 8.4% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); FY2023: grossProfit / revenue = 20%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); FY2024: grossProfit / revenue = 21.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); FY2025: grossProfit / revenue = 22.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); 10-year return on capital observations [[2016,0.00494625467970494],[2017,0.04155116797101974],[2018,0.07470400222272588],[2019,0.1384982921424902],[2020,0.15257859495146753],[2021,0.19612598831606462],[2022,0.07916731189232863],[2023,0.0848364789076362],[2024,0.08325061306549025],[2025,0.12831177368071714]]; median 0.08404354598656322. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 20% gross margin through 2022 cost inflation.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); Gross margin observations: [[2021,0.21134139867605617],[2022,0.19670592751715407],[2023,0.20024107947097877]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back CNY 2.8 billion of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); FY2016: growth capex 0; upkeep 507270583; owner earnings 462299105. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); FY2017: growth capex 0; upkeep 653018407; owner earnings 1231672113. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); FY2018: growth capex 742628537; upkeep 1046025401; owner earnings 2045733654. Growth capex / owner earnings = 0.36301330603226223.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); FY2019: growth capex 1298135170; upkeep 1055017553; owner earnings 3620572466. Growth capex / owner earnings = 0.3585441755939156.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); FY2020: growth capex 884866969; upkeep 1167978000; owner earnings 3728860000. Growth capex / owner earnings = 0.2373022771034579.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); FY2021: growth capex 301849000; upkeep 2970863000; owner earnings 8207187606.772. Growth capex / owner earnings = 0.036778615825832375.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); FY2023: growth capex 0; upkeep 5966784000; owner earnings 3287723628.424. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); FY2024: growth capex 0; upkeep 2938356214; owner earnings 6431860200.454. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); FY2025: growth capex 0; upkeep 4136793157.03; owner earnings 6767392318.18. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); Dividend observations: [[2016,542303120],[2017,460102828],[2018,740934302],[2019,1039445238],[2020,470020105],[2021,3691923000],[2022,3754841000],[2023,1771078000],[2024,3405331078],[2025,3178973070.85]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); FY2025: cash repurchases 2767532026.4625 CNY.

### Are managers owners

Insiders own 37.8% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 000425.SHE SharesStats.PercentInsiders = 37.759 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits shrink 3.8% yearly over ten years; actual growth was 18.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:32.248Z); Ten-year compound average after fade. Initial solved rate -0.06597971072411496. Price 7.03; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.10416738036472772 → FY2025 0.5869268917194372. Closing-price date 2026-10-15.

## Monthly share-price history (CNY per share)

- 2016-10: CNY 3.26 per share

- 2016-11: CNY 3.62 per share

- 2016-12: CNY 3.38 per share

- 2017-01: CNY 3.36 per share

- 2017-02: CNY 4.07 per share

- 2017-03: CNY 4.07 per share

- 2017-04: CNY 3.76 per share

- 2017-05: CNY 3.37 per share

- 2017-06: CNY 3.75 per share

- 2017-07: CNY 4.02 per share

- 2017-08: CNY 3.81 per share

- 2017-09: CNY 3.68 per share

- 2017-10: CNY 3.76 per share

- 2017-11: CNY 3.75 per share

- 2017-12: CNY 4.63 per share

- 2018-01: CNY 4.58 per share

- 2018-02: CNY 4.24 per share

- 2018-03: CNY 3.90 per share

- 2018-04: CNY 4.04 per share

- 2018-05: CNY 4.11 per share

- 2018-06: CNY 4.24 per share

- 2018-07: CNY 4.24 per share

- 2018-08: CNY 4.09 per share

- 2018-09: CNY 3.95 per share

- 2018-10: CNY 3.32 per share

- 2018-11: CNY 3.34 per share

- 2018-12: CNY 3.23 per share

- 2019-01: CNY 3.26 per share

- 2019-02: CNY 3.94 per share

- 2019-03: CNY 4.40 per share

- 2019-04: CNY 4.52 per share

- 2019-05: CNY 4.28 per share

- 2019-06: CNY 4.46 per share

- 2019-07: CNY 4.87 per share

- 2019-08: CNY 4.29 per share

- 2019-09: CNY 4.43 per share

- 2019-10: CNY 4.52 per share

- 2019-11: CNY 4.58 per share

- 2019-12: CNY 5.47 per share

- 2020-01: CNY 5.20 per share

- 2020-02: CNY 5.27 per share

- 2020-03: CNY 5.05 per share

- 2020-04: CNY 5.55 per share

- 2020-05: CNY 5.85 per share

- 2020-06: CNY 5.91 per share

- 2020-07: CNY 6.35 per share

- 2020-08: CNY 6.21 per share

- 2020-09: CNY 5.55 per share

- 2020-10: CNY 5.35 per share

- 2020-11: CNY 5.44 per share

- 2020-12: CNY 5.37 per share

- 2021-01: CNY 5.36 per share

- 2021-02: CNY 7.00 per share

- 2021-03: CNY 7.59 per share

- 2021-04: CNY 7.38 per share

- 2021-05: CNY 6.71 per share

- 2021-06: CNY 6.37 per share

- 2021-07: CNY 5.83 per share

- 2021-08: CNY 6.52 per share

- 2021-09: CNY 6.99 per share

- 2021-10: CNY 6.11 per share

- 2021-11: CNY 5.93 per share

- 2021-12: CNY 5.99 per share

- 2022-01: CNY 5.64 per share

- 2022-02: CNY 5.53 per share

- 2022-03: CNY 5.15 per share

- 2022-04: CNY 4.96 per share

- 2022-05: CNY 5.29 per share

- 2022-06: CNY 5.39 per share

- 2022-07: CNY 5.59 per share

- 2022-08: CNY 5.21 per share

- 2022-09: CNY 4.48 per share

- 2022-10: CNY 4.63 per share

- 2022-11: CNY 5.27 per share

- 2022-12: CNY 5.07 per share

- 2023-01: CNY 5.82 per share

- 2023-02: CNY 7.10 per share

- 2023-03: CNY 6.93 per share

- 2023-04: CNY 6.86 per share

- 2023-05: CNY 5.98 per share

- 2023-06: CNY 6.77 per share

- 2023-07: CNY 7.07 per share

- 2023-08: CNY 6.05 per share

- 2023-09: CNY 6.37 per share

- 2023-10: CNY 5.73 per share

- 2023-11: CNY 5.53 per share

- 2023-12: CNY 5.46 per share

- 2024-01: CNY 5.63 per share

- 2024-02: CNY 5.93 per share

- 2024-03: CNY 6.36 per share

- 2024-04: CNY 7.03 per share

- 2024-05: CNY 7.25 per share

- 2024-06: CNY 7.15 per share

- 2024-07: CNY 6.55 per share

- 2024-08: CNY 6.36 per share

- 2024-09: CNY 7.77 per share

- 2024-10: CNY 7.77 per share

- 2024-11: CNY 8.09 per share

- 2024-12: CNY 7.93 per share

- 2025-01: CNY 7.64 per share

- 2025-02: CNY 8.81 per share

- 2025-03: CNY 8.62 per share

- 2025-04: CNY 8.81 per share

- 2025-05: CNY 8.24 per share

- 2025-06: CNY 7.77 per share

- 2025-07: CNY 8.38 per share

- 2025-08: CNY 9.56 per share

- 2025-09: CNY 11.50 per share

- 2025-10: CNY 10.64 per share

- 2025-11: CNY 10.32 per share

- 2025-12: CNY 11.58 per share

- 2026-01: CNY 10.74 per share

- 2026-02: CNY 12.26 per share

- 2026-03: CNY 10.08 per share

- 2026-04: CNY 9.95 per share

- 2026-05: CNY 9.75 per share

- 2026-06: CNY 8.09 per share

- 2026-07: CNY 8.96 per share

- 2026-08: CNY 7.89 per share

- 2026-09: CNY 7.20 per share

- 2026-10: CNY 7.33 per share

## Annual estimated value (CNY per share)

- FY2016: low CNY 0.90 per share, central CNY 0.94 per share, high CNY 1.00 per share

- FY2017: low CNY 2.36 per share, central CNY 2.96 per share, high CNY 3.32 per share

- FY2018: low CNY 3.20 per share, central CNY 4.04 per share, high CNY 4.53 per share

- FY2019: low CNY 5.18 per share, central CNY 5.94 per share, high CNY 6.64 per share

- FY2020: low CNY 5.69 per share, central CNY 6.24 per share, high CNY 6.98 per share

- FY2021: low CNY 14.53 per share, central CNY 18.73 per share, high CNY 21.21 per share

- FY2022: low CNY 7.56 per share, central CNY 8.92 per share, high CNY 9.97 per share

- FY2023: low CNY 6.82 per share, central CNY 8.44 per share, high CNY 9.56 per share

- FY2024: low CNY 5.83 per share, central CNY 6.42 per share, high CNY 7.20 per share

- FY2025: low CNY 9.70 per share, central CNY 13.07 per share, high CNY 15.04 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

## Reported holder observations