October 18th, Guolonghui | gtja research reports pointed out that xcmg construction machinery (000425.SZ), as a leading domestic construction machinery industry, has revitalized after completing mixed ownership reform. The overseas market expansion is smooth, and with the recovery of domestic and foreign construction machinery industry demand in the second half of the year, the company is expected to benefit. In September, domestic excavator sales were 7,610 units, +21.5%, exceeding CME's previous expectations, mainly due to the rapid growth of small excavators, steady growth of large excavators, and relatively weak sales of medium excavators. However, frequent introduction of real estate policies is expected to promote real estate sales, which may lead to an increase in medium excavator sales. The company's global market share is 5.3%, with overseas revenue in the first half of 2024 reaching 27.7 billion yuan, +4.8%, accounting for 44% of total revenue, an increase of 3.4 percentage points. The gross margin is 24.4%, 2.7 percentage points higher than the domestic sales gross margin. The rapid increase in the proportion of overseas revenue is expected to drive the improvement of gross margin and net margin. The company continues to optimize its product structure, with high-end product revenue growing by over 10% year-on-year, accounting for over 32%. The target price is maintained at 8.22 yuan, with a "shareholding" rating maintained.