On August 24, Yutong heavy Industry Co., Ltd. (hereinafter referred to as: Yutong heavy Industry) released its semi-annual report of 2023, with operating income of 1.365 billion yuan during the reporting period, down 15.09% from the same period last year; net profit belonging to shareholders of listed companies was 97 million yuan, down 42.08% from the same period last year; and the net cash flow generated by operating activities was 159 million yuan, reflecting sound operating ability.

Public data show that Yutong heavy Industry is a large-scale professional manufacturing enterprise integrating scientific research and development, manufacturing and after-sales service, covering sanitation equipment, sanitation services, basic construction machinery and mining equipment.

In the first half of 2023, under the influence of macro-economy, expenditure on energy conservation and environmental protection decreased significantly compared with the same period last year, the funds of sanitation operation and service enterprises were tight, the enthusiasm of purchasing equipment decreased, and the overall sanitation industry showed an obvious downward trend. At the same time, the competition in the industry further intensified. Local sanitation vehicle enterprises and new forces of sanitation car manufacturing have entered into new energy sanitation, with 66 insurance brands, an increase of 50% over the same period last year. The first ten episodes were moderately down 5.8 percentage points from the same period last year. In addition, affected by the slowdown in the growth of infrastructure projects and the obvious decline in the prosperity of real estate sales, the domestic construction machinery industry has declined significantly. According to statistics from the China Construction Machinery Industry Association, in the first half of the year, domestic excavator sales fell 44% year-on-year, and loader sales dropped 32.1% year-on-year. As a result, the market demand for mining vehicles also shrank and the market was weak.

In terms of sanitation equipment, Yutong heavy Industry focuses on the independent research and development of key technologies in the field of sanitation equipment. In the first half of 2023, a number of major breakthroughs have been made in new energy system key technologies, fuel cell vehicle performance improvement, new energy system integration and energy-saving technology, intelligent driving, and operation efficiency improvement. New products will continue to be launched to accumulate competitive advantage.

From the perspective of market demand, the sanitation service industry will continue to develop towards sanitation integration, intelligent management and industrial centralization in the future. Yutong heavy Industry has also accelerated the transformation from a single manufacturing industry to the integration of suppliers of "sanitation equipment + sanitation services" integrated solution. According to its announcements on July 3 and August 7, the subsidiary Aolande Environmental Technology Co., Ltd. (hereinafter referred to as "Aolande") won the bid for Zhengzhou Economic and technological Development Zone Environmental Sanitation and Greening Integrated Service Project and Upper District Sanitation Construction and Service Integrated franchise Project respectively, with a total project amount of 1.225 billion yuan and 264 million yuan respectively. It is expected that the Zhengzhou Economic Development District project will bring about 765 million yuan including tax contract to Aolan (the final amount is subject to the formal contract signed), and the innovative sanitation service model is also expected to promote the steady progress of operation in the second half of the year.

In terms of mining equipment, Yutong has mastered the core technology of Sandian, has a strong product competitiveness in the new energy mineral card market, continues to take the lead in market share, and gradually develops overseas markets. Projects have been launched in Thailand, Indonesia, the United Arab Emirates, Chile and other countries and regions, and deep ploughing overseas markets will bring new growth points for its performance.

From the perspective of long-term development, with the continuous improvement of the urbanization rate and the improvement of the standard of urban fine management, there is still a large space for the scale of domestic sanitation services. At the same time, under the guidance of the national double carbon target strategy, the new energy of sanitation, construction machinery and mining equipment has become the trend of the future. Yutong heavy Industry, as the mainstream enterprise to master the core technology of new energy, is proactive in the layout of new energy in the fields of sanitation, construction machinery and mining equipment, and is also in a leading position in intelligence and automation, which is expected to continue to drive the overall development of the industry in the future.