On the eve of the new year, we extend our warmest greetings to all the leaders and employees of the Group, and offer our sincere thanks to the friends from all walks of life and our global partners who have long supported the development of Shandong Heavy Industry Group!
The year 2024 marked the beginning of fully implementing the spirit of the Third Plenary Session of the 20th Central Committee of the Communist Party of China. It was also an extraordinary year that say Shandong Heavy Industry Group build upon its past achievements while forging new paths forward. Throughout the year, we remained committed to General Secretary Xi Jinping's important instructions for Shandong Heavy Industry Group, steadfastly focusing on our core business and following through our strategic blueprint. Throughout the year, the provincial party committee, provincial government, and relevant units at all levels provided strong support and care, helping us overcome challenges and forge ahead. Throughout the year, 160,000 employees of Shandong Heavy Industry Group worked tirelessly and united as one, pooling efforts to drive the Group's progress, achieve new milestones, and break new ground.
Throughout the year, we have tackled challenges head-on and forged ahead against the current, achieving outstanding results through solid work. Despite the dual challenges of a sluggish domestic equipment manufacturing industry and weakening international market momentum, we spared no efforts to capture market share, adjust our structure, foster innovation, and improve quality and efficiency. We implemented management and improvement initiatives focused on 'quality, innovation, and cost reduction,' reducing costs and enhancing efficiency across the entire value chain. In 2024, the Group anticipates a consolidated revenue of RMB 550 billion yuan, up 9% year-on-year, and a total profit of RMB 28.1 billion yuan, up 29% year-on-year, setting new historical records. Our profitability continues to lead the industry and rank first among provincial enterprises. Operational efficiency indicators, including asset-liability ratio, return on equity, R&D expenditure intensity, and labor productivity, collectively referred to as the 'one profit and five ratios,' have been consistently optimized, indicating a stable yet progressively improving development trajectory.
Throughout the year, we have actively seized market opportunities and optimized our strategic layouts, building new competitive advantages with an unwavering drive for excellence. By benchmarking against the industry leaders and competing with the fastest, strongest and best, we achieved significant year-on-year growth in sales and market share across engines, heavy trucks, agricultural equipment, construction machinery, and buses, even amid a challenging market downturn and intensified competition in China. Weichai's heavy-duty engines, Sinotruk's heavy trucks, Weichai Lovol's agricultural equipment, and Shantui's bulldozers all retained their industry-leading positions in the domestic market, with a substantial increase in the proportion of high-end and high-value-added products. Looking ahead, we will define strategic transformation in new energy, digitization, and the aftermarket. By accelerating our efforts toward green, intelligent, and high-end growth, we aims to achieve a 230% year-on-year rise in new energy heavy truck sales, so as to secure the top spot in the industry.
Throughout the year, we've forged ahead globally with an open and cooperative approach to enhance our brand influence. As part of the 'Optimizing Market Layout and Building a Brand Matrix' initiative, we held global Partners Conferences and new product exhibitions in Mexico, Germany, France, Indonesia, Singapore, and other locations, earning widespread recognition from clients around the world. In 2024, our overseas businesses are expected to generate revenue of RMB 110 billion yuan, with stable growth trends, and achieve a total profit of RMB 4.52 billion yuan, up 30% year-on-year. Key subsidiaries such as Kion in Germany and Ferretti in Italy have seen substantial improvements in profitability. Our export performance remains strong, with revenue expected to reach RMB 97.6 billion yuan, a 14% increase compared to the previous year. Exports of heavy trucks account for 64% of China’s total for this segment, while exports of buses, agricultural equipment, and excavators are expected to grow year-on-year by 61%, 36%, and 35%, respectively. Additionally, our generator sets for data centers have seen fast expansion in the high-end international markets.
Throughout the year, we have persisted in innovation to reach new peaks, fueling a new technological momentum with a spirit of independence and resilience. Guided by principles of practicality, utility, and effectiveness, we have collaborated with global partners in the industrial, supply, and innovation chains to speed up the construction of an innovative system integrating industry, university, research, and application. In 2024, the Group’s investment in R&D is expected to reach RMB 12.5 billion yuan, increasing its R&D intensity to 3.7%, to maintain its industry-leading position. Weichai launched the world's first diesel engine with a thermal efficiency of 53.09%, setting a new world record for the fourth time and claiming the top spot in the inaugural 'Top Ten Technological Innovations' of provincial enterprises. Sinotruk introduced its upgraded Yellow River Hydrogen-powered Internal Combustion Engine Tractor, breaking the commercial heavy truck low drag limit with a wind resistance coefficient of 0.286. Key products such as the Shacman Heavy Truck X6000, Weichai Lovol High-power CVT Tractors, Shantui Smart Construction Solutions, Zhongtong H-series High-end Tour Buses, and Ferretti Luxury Yachts made dazzling debuts on the international stage, earning widespread acclaim.
Throughout the year, we have deepened reforms and standardized governance, enhancing the Group's management capabilities with a vision aligned to first-class standards. We have broken free from conventional thinking, jumped out of the box, and overcome dependency on established paths, fostering new momentum for transformation through reform initiatives. Under the principles of 'strong headquarters, expansive industries, fewer levels, and broader spans,' we have optimized our organizational structure, reduced management hierarchies, improved management efficiency, implemented a higher management level for key subsidiaries and built a headquarters that is learning, innovation, control, leadership, and service-oriented to improve the Group's capabilities for large-group, specialized and global operation management. Besides, we have clarified the roles and responsibilities of governance bodies, further improving legal, democratic, and scientific decision-making for major matters, accelerating the modern corporate governance of state-owned enterprises reflecting Chinese characteristics, and significantly enhancing the institutional, scientific, standardized, and systematic management systems with the Group.
Throughout the year, we have stayed true to our original aspirations and forged the soul of the organization through party building activities, uniting all forces in the same direction to build a shared development vision. We have diligently studied and implemented the spirit of the Third Plenary Session of the 20th Central Committee of the Communist Party of China, conducted extensive Party discipline education, and put our firm support for the 'Two Establishes' and resolute commitment to the 'Two Upholds' into concrete actions. The Group's Party Committee has issued the Decision on Further Strengthening its Own Construction, which clearly outlined the strict standards for the 'Ten Leading Roles' and vigorously advocated a clear orientation towards political steadfastness, entrepreneurship, and clean governance. We have organized the educational activity under the theme 'One Family, One Heart, Work Together, Surely Succeed,' and the clean governance cultural construction activity under the theme 'Upholding Virtue, Diligence, and Integrity.' We have placed employees' pursuit of happiness as the guiding principle of our work, ensuring that 'Work in Heavy Industry, Happiness in Heavy Industry' becomes the most beautiful commitment between the Company and its employees.
The journey to becoming a world-class company has always been fraught with challenges and obstacles. Having endured all the storms, we march forward, with each step becoming steadier; having overcome one challenge after another, we move ahead with stronger confidence. In 2024, every effort will bear fruit, every struggle will echo with success, and every dream will shine brightly. All the hardworking frontline workers, the determined researchers, the meticulous craftsmen, and the pioneering overseas employees...from Shandong Heavy Industry Group are working tirelessly, overcoming difficulties, and chasing their dreams. Every single one of them is extraordinary, remarkable, and great! United as 'One Family,' with 'One Heart' and 'Work Together' for 'Surely Succeed,' we fear nothing and are destined to succeed. Together, we are creating the most beautiful chapter of Shandong Heavy Industry Group's high-quality development!
In the year ahead, we will continue to uphold Xi Jinping's Thought on Socialism with Chinese Characteristics for a New Era, resolutely shoulder the responsibility of 'Leading the Way and Shouldering the Heavy Responsibility,' and prioritize high-quality development as our main objective. We will forever be industrious, forever stand at the forefront, forever strive for the first place. We will fully commit to building a world-class multinational group, characterized by cutting-edge technology, green development, and leadership in the high-end equipment sector, and make even greater contributions to the Chinese-style modernization in Shandong!
Happy New Year to all! May your family be filled with happiness, and may everything go your way!
Shandong Heavy Industry Group Co., Ltd.
December 31, 2024
鲁公网安备37010202000616号
