BUSINESS

Chart of the Day: Exchange Rate Swings Hit Profits of China’s Heavy Machinery Majors

Published: May. 5, 2026 5:33 p.m. GMT+8

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China’s leading construction machinery manufacturers struggled to grow profits in the first quarter of 2026 despite decent revenue growth, as volatile foreign exchange rates eroded their earnings.

The profit squeeze highlights a growing vulnerability for Chinese heavy equipment makers, who have increasingly relied on overseas markets for growth but remain highly exposed to currency fluctuations as they lack deep local manufacturing capabilities.

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China's top construction machinery firms (Sany, Zoomlion, XCMG, Liugong) faced Q1 2026 profit stagnation or declines (Zoomlion ~40% drop) despite revenue growth, due to FX losses.
Overseas revenue in 2025: 64% Sany, 58.6% Zoomlion, 48.2% XCMG, 47.7% Liugong; e.g., XCMG FX/hedging losses >400M yuan.
Firms plan yuan settlements, hedging, and localized production to counter currency volatility.

AI generated, for reference only

Who’s Who

Sany Heavy Industry Co. Ltd.: Sany Heavy Industry Co. Ltd. (600031.SH) saw net profit rise less than 1% in Q1 2026 amid revenue growth, hit by FX losses from overseas sales (64% of 2025 revenue). It warned of currency volatility squeezing profits and plans to hedge via asset-liability matching, plus localize production, settlements, and supply chains abroad. (62 words)

Zoomlion Heavy Industry Science and Technology Co. Ltd.: Zoomlion Heavy Industry Science and Technology Co. Ltd. (000157.SZ) saw net profits drop nearly 40% in Q1 2026 despite revenue growth, due to exchange losses. Financial expenses surged 673.7% YoY to 500 million yuan, driven by currency fluctuations. Overseas revenue was 58.6% of total in 2025. The company relies on exports but lacks deep local manufacturing, exposing it to FX volatility. (68 words)

XCMG Construction Machinery Co. Ltd.: XCMG Construction Machinery Co. Ltd. (000425.SZ) saw Q1 2026 net profits rise <1% amid revenue growth, hit by exchange losses and hedging costs >400M yuan (vs. >400M gain in Q1 2025). Overseas revenue was 48.2% of 2025 total. Plans: prioritize yuan settlements, forward contracts, and accelerate overseas manufacturing localization in 2026.

Guangxi Liugong Machinery Co. Ltd.: Guangxi Liugong Machinery Co. Ltd. (000528.SZ) reported Q1 2026 profit drops amid exchange losses of 165 million yuan ($24M), due to USD depreciation vs. yuan, US-Israel-Iran conflict, rising energy prices, and minor currency declines. Overseas revenue was 47.7% of total in 2025. (48 words)

AI generated, for reference only