The construction and mining machinery maker has filed for an IPO, backed by Weichai Power and parent Shandong Heavy Industry

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Key Takeaways:

• Heavy equipment maker Shantui Construction has filed to list in Hong Kong, reporting its profit climbed 9% last year
• The company's overseas operations boast much higher gross margins than its domestic business, while its excavator sales are expanding rapidly

Data centers and cloud services aren't the only beneficiaries of a recent building boom for AI infrastructure. Another group reaping business from the boom is companies providing the machinery used to build those centers. Now, one of those, construction machinery maker Shantui Construction Machinery Co. Ltd. (000680.SZ), has applied to list in Hong Kong. The company is already listed in Shenzhen, and its Hong Kong IPO joins a recent tide of Chinese companies seeking such second listings to broaden their investor bases.

Formerly known as Shandong Dozer General Factory, Shantui Construction is a vital piece of the larger Shandong Heavy Industry Group, whose portfolio also includes other dual-listed companies like Weichai Power (000338.SZ, 2338.HK) and Sinotruk (000951.SZ, 3808.HK). The parent is currently Shantui Construction's largest shareholder, directly holding 24.29% of the company, while it indirectly owns additional shares through Weichai Power's 15.78% stake.

Carried by bulldozers

Shantui Construction's products cover two primary segments: construction machinery and components. The construction machinery segment spans bulldozers, excavators, loaders, road machinery, mining trucks and concrete machinery. Components primarily focus on undercarriages and transmission parts.

The bulldozer segment was historically the company's cash cow. In 2025, Shantui Construciton commanded 10.2% of the global bulldozer market, ranking third worldwide. It is China's undisputed leader in that area with 63% of the market, continuously holding the top spot since 2004. The bulldozer business generated 1.32 billion yuan ($194 million) in gross profit for the company last year, representing 43.5% of its total gross profit of 3.03 billion yuan.

The global bulldozer business continues to expand rapidly, driven by accelerating infrastructure investments, as well as an uptick in mining activity. Their primary uses for earthmoving, grading and mining have made bulldozers important equipment across a range of operations such as mining, railway construction, and port development. Spurred by rapid urbanization, augmented mining efforts and expansive land development in developing nations, the global bulldozer market is expected to expand from $7.8 billion in 2025 to $9.2 billion by 2030, according to third-party research in Shantui's IPO prospectus.

The company's bulldozer sales rose 17% in 2023 to 3.95 billion yuan, though they dropped 12% last year to 3.48 billion yuan as China's property market remained weak.

Excavator segment growing rapidly

Shantui Construction's excavator business is on a stronger track, functioning as one of its crucial growth engines. Gross profits for this segment doubled to 519 million yuan in 2024, and then doubled again to 1.09 billion yuan last year. The segment's contribution to the company's overall gross profit grew from 18.9% in 2024 to 36% last year, consolidating its place as the second-largest gross profit contributor.

Unlike its more mature bulldozer business, Shantui's excavator sales have been rising steadily over the last three years, including 30% growth last year to 3.94 billion yuan from 3.02 billion yuan in 2024, taking the top revenue-earning spot from bulldozers.

The wider uses of excavators in infrastructure building, mining and urban construction has created strong demand for the equipment, with the global market worth $70.6 billion in 2025 — far bigger than the bulldozer market. The market is expected to further swell to $97.1 billion by 2030, which should benefit Shantui Construction as it builds its position in that segment.

While China's own construction machinery sector is currently facing headwinds from its property downturn, the global sector is benefiting from Beijing's "Belt and Road Initiative" that is seeing Chinese companies build infrastructure across Southeast Asia, Africa, and South America – often using Chinese equipment. Shantui's share of gross profits generated from overseas has been rising steadily, from 76.7% of its total gross profit in 2023 to 81.2% in 2025. Overseas sales are typically far more profitable for the company, commanding a 28.1% gross margin last year — drastically outpacing the 9.6% figure for its domestic sales. The rise in higher-margin overseas sales helped lift the company's profit 9.1% last year to 1.21 billion yuan.

Seasonal weakness

Investors should note that the construction machinery industry is subject to regular seasonal cycles. The first and second quarters are traditionally strong, given the centralized kick-off of major projects across China after the Lunar New Year. That means the March-to-June window is usually a procurement peak. But orders generally taper off after that, with July through September as a typically slow season. Things tend to recover by the fourth quarter, galvanized by the release of year-end fiscal budgets and a sprint to meet construction milestones ahead of the seasonal winter pause.

The global mining and construction machinery sector is currently led by two industry stalwarts: U.S.-listed Caterpillar (CAT.US) and Japan's Komatsu (6301.JP). Holding 15.8% and 11% of the global market last year, respectively, these heavyweights boast estimated price-to-earnings (P/E) ratios of 38 times and 18 times for the current year. Meanwhile, Hong Kong shares of Sany Heavy Industry (6031.HK; 600031.SH) trade at a forward P/E of roughly 16 times. Shantui's Shenzhen-listed shares trade slightly below that at a trailing ratio of about 15.

A pricing of the company's Hong Kong shares at a multiple below 10 times earnings would represent an exceptionally attractive valuation, whereas a range of 16 to 18 times still looks reasonable but slightly aggressive. Anything much higher than that would risk making the stock appear expensive due to the company's relatively smaller global footprint when benchmarked against industry titans like Caterpillar and Komatsu

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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.