As CIMC Vehicles is the global leader in sophisticated manufacturing of semi-trailers and specialty vehicles, its actions have attracted much attention. On the evening of 26 April, CIMC Vehicles released its results for the first quarter of 2022. It achieved revenue of RMB5,132.3 million and net profit attributable to the parent company of RMB124.5 million. It sold a total of 33,205 units of semi-trailers, truck bodies for specialty vehicles, and lightweight van truck bodies worldwide。

Faced with global geopolitical conflicts, rising inflation, soaring prices of raw materials and bulk commodities, and flare-ups of epidemics across the globe, CIMC Vehicles had a shortterm fluctuation in the performance. Yet, by leveraging the advantages of “Light Tower” Plant-oriented Sophisticated Manufacturing System and Intercontinental Operation, CIMC Vehicles actively captured the development opportunities of cold chain and new energy, and constantly increased market segments share. Moreover, people could see how market leaders gained increasingly larger market shares and moved forward steadily through the cycle.

WITH HIGHLIGHTED ADVANTAGES OF INTERCONTINENTAL OPERATION, CIMC VEHICLES HAS STEADILY INCREASED ITS GLOBAL MARKET SHARE

In the past, the semi-trailer industry cluster was small in scale and had significant regional distribution. But now, with the obvious improvement of industry standards, the competition pattern has also developed from extreme decentralization towards centralization. Leading enterprises are becoming beneficiaries by virtue of their advantages in scale, technology and products. The development of CIMC Vehicles in the past few years has simply proved this statement.

Particularly, since last year, repeated domestic epidemics have led to the obstruction of logistics and transportation; global inflation and rising prices of raw materials have exerted pressure on the operation of manufacturing enterprises. Therefore, empowered by its “Sophisticated Manufacturing System”, CIMC Vehicles has taken the initiative to deepenthe business model of “Intercontinental Operation, Local Manufacturing” in line with current global conditions. It has also maximized the Company ’s production capacity, assembly capacity, global supply chain management capabilities and global distribution logistics management capabilities in 23 production plants and 10 assembly plants in the world. At present, it has formed a cross-border operation paradigm with core competitiveness.

Meanwhile, CIMC Vehicles has actively upgraded its strategy and established six major businesses or groups to help remove internal barriers in operation and formed an all-round management from strategy, operation to coordinated development, thus enhancing the Company’s ability to resist risks and cycles.

Over the past year, the six major businesses or groups have achieved remarkable results; The global leading position of CIMC Vehicles has been further strengthened. According to the Global Trailer’s top global OEM ranking list for semi-trailer manufacturers in terms of production volume announced in 2021, CIMC Vehicles has been the world’s No. 1 semitrailer manufacturer for nine consecutive years. In the domestic market, according to the statistics released by the China Association of Automobile Manufacturers, the semi-trailer products of CIMC Vehicles and its subsidiaries accounted for 7.12%, 10.22% and 12.09% of the market share, ranking first in industry from 2019 to 2021, and the market share was further increased. According to the China Association of Automobile Manufacturers, its sales of concrete mixer trucks ranked first in China for five consecutive years, with a market share of 29.3%. In the overseas market, the refrigerated semi-trailer in North America ranked third in the North American market; SDC ranked first in the UK market, with a market share of 27.5%.

In the first quarter of 2022, the income level was curbed by the delayed delivery of orders as a result of logistics and transportation snags in China arising out of the flare-ups of the pandemic. For example, the business performance of Champion Tanker Business Group slowed down due to the impact of the transition from China V to China VI emission standards; the order delivery of Light Tower Pioneer Business and TB Business Group was delayed due to the pandemic.

Yet, due to the favorable policies of drop and pull transportation, new energy, rural revitalization and cold chain logistics, the markets of semi-trailers, specialty vehicles and cold chain vehicles have ushered in new opportunities for development. CIMC Vehicles will also seize the opportunity of the recovery of domestic logistics transportation and favorable policies to actively expand its business and achieve high-quality growth. 

In particular, the overseas business of CIMC Vehicles performed well in the first quarter. Benefited from the continuous unleash of demand for semi-trailers in the North American market, the Nor th American Business achieved a significant YoY increase of 108.8% in revenue. The European Business saw both a challenge and an opportunity under the influence of global geopolitical conflicts, with a steady increase in sales volume and revenue. 

Several research institutes were optimistic about the development of CIMC Vehicles. Recently, CITIC Securities issued a research report that CIMC Vehicles ranked first in the world for nine consecutive years in terms of production volume, securing a stable position in the industry. Moreover, as it has developed an optimized overseas market layout, which is expected to benefit from the recovery of the overseas economy and the corresponding stimulus plan. Thus, CIMC Vehicles’ market share in Europe and the United States is expected to further increase. CICC also published a Company research report to suggest that since the global semi-trailer and Truck bodies for specialty vehicles industry has a vast market, CIMC Vehicles, as a leading enterprise with certain advantages, has an enormous growth room for its comprehensive market share.

TARGETING AT THE COLD CHAIN AND NEW ENERGY INDUSTRIES WITH OBVIOUS REASONS FOR HIGH GROWTH

While expanding its market share, CIMC Vehicles has also allocated more resources t o t h e e s t a b l i s h m e n t o f l o n g - t e r m competitiveness. As far as its target at the cold chain and new energy industries is concerned, both of them are high-speed growth areas under the national key development. Hence, the reasons for the high growth of CIMC Vehicles has been still obvious.

Cold chain logistics has really gone viral as the industry’s key policies continue to be implemented. “14th Five-Year Plan for Cold Chain Logistics Development” issued by the General Office of the State Council in December 2021 specifies that about 100 national backbone cold chain logistics bases will be constructed. The National Development and Reform Commission issued the “Implementation Plan for the Construction of the National Backbone Cold Chain Logistics Bases”, which specified systematic arrangements for the layout and construction of the national backbone cold chain logistics bases during the “14th Five-Year Plan” period. In February 2022, All China Federation of Supply and Marketing Cooperatives issued “the 14th Five-Year Plan Development Plan for the Cold Chain Logistics of Public Agricultural Products”, which specified the layout of cold chain logistics in the field of agricultural products; in April, the Ministry of Transport and other five departments jointly issued the “Implementation Opinions on Accelerating the High-quality Development of Cold Chain Logistics Transportation”, which proposed to cultivate key cold chain transportation enterprises and established a number of well-known cold chain transportation service brands. In addition, many regions in Zhejiang and Shandong have issued policies to vigorously develop cold chain logistics and proposed to actively cultivate leading enterprises in the industry.

With the introduction of a series of favorable policies, the cold chain logistics industry will usher in a golden period of development. According to the 14th Five-Year Plan for Cold Chain Logistics Development, the market size of China’s cold chain logistics market exceeded RMB380 billion in 2020; the total market size of China’s cold chain logistics market is estimated to be about RMB915.4 billion by 2025, representing an increase of 140.89% over 2020.

To capture the industry opportunities, TB Business Group launched the “TB” brand to actively optimize the capacity layout of refrigerated van truck bodies and dry van truck bodies. On the one hand, it is mainly used for the cold chain logistics and transportation of “6+1” key categories (meat, fruit, vegetables, aquatic products, dairy products, frozen food and other major fresh food and pharmaceutical products such as vaccines); on the other hand, it launched dry van truck bodies mainly for urban logistics and distribution. Additionally, with respect to technology, CIMC Vehicles innovated the K2 dual-mode foaming technology of new-generation refrigerated vans with independent intellectual property rights. This is a major breakthrough in refrigeration fo a m i n g te c h n o l o g y a n d p ro d u c t i o n equipment. As such, TB Business Group will become a new business growth point of the Company in the future.

In addition to cold chain logistics, the value of the new energy market should be highlighted. In 2022, the government work report put forward the idea of “continuing t o s u p p o r t t h e c o n s u m p t i o n o f n e w energy vehicles”. Coupled with the support of policies such as the new blue-brand regulations, the market demand for new energy commercial vehicles is expected to continue to unleash. According to the data of the China Association of Automobile Manufacturers, the sales of new energy commercial vehicles in 2021 amounted to 186,000, a cumulative increase of 54% over the same period. Data from terminal license shows that, from January to March 2022, the total sales of new energy heavy trucks were 4,720, a year-on-year increase of 661%.

In the face of the booming demand in the new energy commercial vehicle market, CIMC Vehicles seized first-mover opportunities to develop and deepen the joint development strategy with tractor manufacturers and invested in the research and development and promotion of new energy urban dump truck produc ts, thereby continuously enhancing the product competitiveness. At present, CIMC Vehicles has expanded its new energy battery-driven dump truck business by successfully developing battery-driven dump truck bodies, battery-driven mining truck bodies, battery-driven sand and gravel truck bodies, and battery-driven coal truck bodies, etc. It is expected the new energy product orders will increase.

In the future, CIMC Vehicles will continue to deepen the Sophisticated Manufacturing S y s t e m a n d m a n a g e m e n t o f “ n e w infrastructure”, and develop an innovative business model of “Product + Service + Finance”, and actively expand its businesses. Moreover, the Company will build and upgrade the “Light Tower” Plants as planned, so as to give full play to the effectiveness of the “Light Tower Manufacturing Network” and continuously improve product profitability. In this way, CIMC Vehicles can achieve the high-quality development of the six major businesses or groups in the intercontinental operation territory. Probably because of the high predictability of CIMC Vehicles’ per formance growth and the constant investment logic that market leaders gain increasingly larger market shares, CIMC Vehicles can attract investors’ attention in the current volatile capital market with the costeffective advantage of low valuation.