Xugong's mixed-ownership reform made XCMG one fully listed machinery giant by 2022

Xugong Group Construction Machinery, the parent of China's biggest construction-equipment maker, was a state-owned group whose core businesses were split awkwardly across a listed shell and an unlisted parent. Its excavator business alone recorded 2019 revenue of $2.4 billion, yet it was not inside the Shenzhen-listed XCMG Construction Machinery, which Xugong controlled with a 38% stake. That structure left the group's strongest assets without direct equity-market access while it faced an expanding private rival, Sany Heavy Industry, and global leader Caterpillar.

Beijing's mixed-ownership reform policy, which aimed to revive state-owned enterprises by injecting private capital and improve governance, gave Xugong the opening. In December 2020 Reuters reported that about ¥14.8 billion ($2.26 billion) would come from a dozen new investors for a combined 46% of Xugong, in one of China's biggest SOE mixed-ownership reforms. Singapore sovereign fund GIC and Chinese private equity firm CITIC PE together agreed to invest ¥3.3 billion for a 10.5% stake, making them the largest among the new investors, and the deal valued Xugong at roughly ¥32 billion.

The reform's second act was the decision to whole-list the group. Xugong planned to inject about $2.1 billion of assets into the listed XCMG — including its core excavator business — with Xugong's shareholders receiving XCMG stock and the unlisted parent dissolved by the end of 2022. That was completed on August 29, 2022: 6.97 billion new XCMG shares began trading after the listed company absorbed Xugong in a share-for-share merger at ¥5.55 per share, consolidating the group's excavator, concrete, mining and tower-crane assets into one listed entity.

The whole listing put the group's results on the listed company's books: pro-forma 2021 revenue rose 38.47% to ¥116.77 billion from ¥84.33 billion standalone. In 2022, despite an industry downturn, the merged XCMG reported revenue of ¥93.817 billion ($13.20 billion), overseas revenue of ¥27.838 billion up 50.5%, and export income of ¥21.63 billion up 70.5%, holding No.3 on KHL's Yellow Table of the world's top 50 equipment makers for a third straight year.

Investors paid ~¥14.8bn for 46% of Xugong; the 2022 whole listing produced a ¥93.8bn-revenue maker ranked No.3 globally, with overseas revenue up 50.5%.

China's mixed-ownership policy let a provincial state group bring in GIC and CITIC PE without an outright sell-off, preserving state influence while adding private capital and discipline.

Valuing Xugong at about ¥32bn and anchoring the round with a ¥3.3bn GIC–CITIC investment made the sale credible to a dozen investors taking 46%.

Whole-listing through an absorption merger moved the excavator crown jewel and other unlisted assets into the listed vehicle, ending the group's structural overhang.

Issuing XCMG shares to all 17 Xugong shareholders aligned the state parent and outside investors on one listed currency and one governance structure.

A cleaner listed group could fund the overseas push: within two years export income grew 70.5% and international revenue reached 30% of the total.

An SOE whose best assets sit in an unlisted parent can unlock them through ownership reform: sell minority stakes to outsiders, then merge the whole group into its listed vehicle.

XCMG completed the whole listing on August 29, 2022, and by mid-2023 held No.3 on KHL's Yellow Table for three consecutive years while leading Chinese OEMs, reporting 2022 revenue of ¥93.817 billion ($13.20 billion) despite an industry downturn. Overseas revenue grew 50.5% and export income 70.5%, with large batches delivered to high-end markets in Europe, North America and Belt-and-Road countries. The deal became a benchmark of the mixed-ownership wave, moving Xugong Group's core machinery assets into a single listed company with state capital free to enter and exit in an orderly way.