The company will supply its autonomous mining trucks and related technology to MMD Group, as it seeks to cultivate the international market

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Key Takeaways:

• CiDi announced a new partnership to provide its autonomous mining trucks and related technology to Britain's MMD Group
• The tie-up comes as CiDi tries to diversify beyond its home China market, where stiff competition is eroding its margins

It made history last December when it became the first company to list among a new generation of Chinese autonomous mining truck makers. Now, CiDi Inc. (3881.HK) has scored another milestone with a deal that could take it beyond its home China market that currently accounts for nearly all of its revenue.

Investors applauded the new partnership with British mining equipment maker MMD Group Ltd., announced last week, by bidding up CiDi shares 5% the day after the announcement. MMD is a relatively niche player in the massive global market for mining equipment, focused on mineral sizers, also known as crushers, as well as feeding equipment. Still, the partnership seems like a significant endorsement of CiDi, both for its autonomous electric mining trucks and also the technology that underpins them.

While autonomous mining trucks are a tiny niche of the much larger autonomous driving sector, they are still quite large, worth 1.9 billion yuan ($278 million) in China alone last year and expected to reach about 40 billion yuan by 2030, according to third-party market data from CiDi's IPO prospectus last year. The global market is obviously much larger, which is what CiDi is eying with this new partnership.

Autonomous technology is especially attractive to mining companies because it minimizes the potential for injuries and deaths of drivers and other workers when accidents occur at mines. That has translated to strong government support in China, which in 2024 issued a document emphasizing the importance of mining safety and necessity of speeding up development of unmanned mining trucks. 

CiDi's latest deal will see it supply its autonomous driving systems for use in MMD Group's mining equipment automation solutions. MMD will also sell CiDi's core autonomous mining trucks, along with dispatch systems and charging infrastructure, giving the Chinese company an important outlet to extend its global reach.

"This partnership marks a milestone in bringing CiDi's autonomous mining technology to global markets," said CiDi co-founder and executive director Ma Wei. "It represents a transition from domestic leadership to international deployment."

That said, we should point out MMD appears to be a relatively small company on the global mining equipment scene, where much bigger names like Japan's Komatsu (6301.T) and U.S. giant Caterpillar (CAT.US) are the leaders. As a private company, MMD doesn't disclose any financial information on its website.

But according to data tracking platform Prospeo, the company's revenue is relatively modest at around $30 million annually. Its market cap is also relatively small at about $100 million. Those figures are even smaller than comparable ones from CiDi, whose revenue roughly doubled last year to 885 million yuan, or more than $100 million, from 410 million yuan in 2024. CiDi's market cap is also much larger at about $1.8 billion, including the addition of $90 million from the 5% jump in its stock price after the new partnership announcement – nearly equal to MMD's total market cap.

What's more, the fact that CiDi only disclosed the new partnership on its website and didn't provide an official announcement through the Hong Kong Stock Exchange suggests it realizes the tie-up will have relatively limited impact, at least initially.

Still, the partnership does seem to represent a validation of CiDi's technology by a significant company outside China. And we should point out the majors like Caterpillar and Komatsu already have their own autonomous equipment divisions, and thus are less likely to look to companies like CiDi for assistance.

Global expansion

CiDi is in a three-way race with two other Chinese companies, Eacon Group and Boonray Intelligent, to build up their autonomous mining truck and technology businesses. Both Eacon and Boonray have also filed for Hong Kong listings, the former at the end of last year and the latter in January. CiDi won that race to market by making its trading debut last December, and its shares have risen about 25% since then.

All three companies have strong backing from the investment community, with CiDi counting names like HSG, formerly known as Sequoia China, Baidu and Legend Holdings among its pre-IPO investors. The other two have more direct backing from the new energy sector, with Eacon counting battery giant CATL among its investors and Boonray getting support from BYD.

The truck-making trio remain mostly confined to China right now, but CiDi points out in the new partnership announcement that it has been working to expand its international presence in Australia, South America and the Middle East. In its first post-IPO annual results announcement, filed last month, the company said it scored its first major order outside Mainland China last year with the sale of 12 trucks to a mine operated by Taiwan Cement.

CiDi's business has been doing quite well in China so far, though it's still losing money. The company delivered 630 units/sets of its autonomous mining solutions last year, which was more than four times what it delivered in 2024, bringing its total deliveries to date to 1,500 units. The fact that its revenue only doubled last year, compared to the quadrupling of its deliveries, suggests the company is coming under pressure to lower prices as it fights for market share.

That pressure shows up in CiDi's gross margin, which fell more than 3 percentage points last year to 21.4% from 24.7% a year earlier. The move abroad, including the new partnership, could help to support that falling metric, since margins abroad are typically quite a bit higher than what companies can earn in the competitive China market.

As its gross margin fell, CiDi's loss nearly doubled to about 1 billion yuan last year from 581 million a year earlier. Its adjusted loss, which excludes certain non-cash items, was smaller but still nearly doubled to 242 million yuan from 127 million yuan in 2024.

CiDi's new partnership represents an important validation of its products and technology, which is why investors have generally continued to support the company. But the post-IPO gains for its stock could start to erode unless it starts to show it can boost its margins and chart a path to profitability in the next year or two.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.