On March 9, Zhan Chunxin, Chairman of Zoomlion Heavy Industry Science & Technology Co., Ltd., said in an exclusive interview that the market size of the agricultural machinery sector will be no less than that of construction machinery, the scale of the environmental industry will also be no less than that of construction machinery, and heavy engineering will also be no less than construction machinery in the future. If the four sectors can advance side by side, Zoomlion will no longer be a cyclical enterprise.

　　The following is a transcript of the interview:

　　Reporter: Hello, Chairman Zhan. Thank you for accepting the reporter's interview. A particularly hot topic this year is mixed-ownership reform. I know that Zoomlion is a state-owned enterprise. Do you have any future plans to make some explorations in this regard?

　　Zhan Chunxin: Zoomlion is a mixed-ownership enterprise, because from its shareholding structure it is already a mixed-ownership enterprise. The Hong Kong Securities Clearing Company, that is, Hong Kong H-shares, accounts for 18%, state-owned shares account for 16 point something percent, strategic investors account for 9 point something percent, and the management team also accounts for about 8%.

　　Reporter: You are ahead of national policy.

　　Zhan Chunxin: It should be said that after several years of reform, it has already become a mixed-ownership enterprise.

　　Reporter: Is there room for further deepening in the future?

　　Zhan Chunxin: I think there is, that is, how to continuously mobilize the enthusiasm of key employees and let these key employees share the benefits of the enterprise.

　　Reporter: The machinery industry has been in a cold winter for the past two years. As a global leading enterprise, could you predict when it will emerge from this cold winter?

　　Zhan Chunxin: Construction machinery is a cyclical industry. For several consecutive years it has been adjusting, fluctuating at a low point. In such a period, and even after a period of time, I think it should be fluctuating upward.

　　Reporter: Since last year, there has been a lot of heated discussion about the recovery of American manufacturing. Do you think this will help revive our construction machinery industry?

　　Zhan Chunxin: First, this industry is an industry with overcapacity. First, there is market recovery; second, there is the improvement of one's own competitiveness; third, you cannot be limited to just a local market; you should occupy the global market. When your competitiveness improves and your global market expands, it will absorb your excess capacity. At that time, your enterprise will have great development. Therefore, we should think more about this issue.

　　Reporter: If based on the judgment of overcapacity, will a batch of such enterprises die in China in the future, be merged, acquired, or go bankrupt themselves? Do you feel this situation will occur?

　　Zhan Chunxin: There used to be a saying called "close, suspend, merge, or convert." Some may need to be closed. Overcapacity means there is excess. Either close them or convert them. So I think this will happen.

　　Reporter: There is also a small question. Is Zoomlion currently also making attempts at transformation? Because we see that in the agricultural machinery field, it has already made preparations for a relatively large push?

　　Zhan Chunxin: In addition to construction machinery, Zoomlion has begun to transform into three other sectors: first, agricultural machinery; second, the environmental industry; third, heavy truck machinery parts. If this transformation is done well, it will enable the enterprise to achieve sustainable development.

　　Reporter: In the past two days, I also interviewed relevant people from Chery Heavy Industry and Foton Motor. They have been making agricultural machinery for a relatively long time. As a latecomer, what strategic things do you have to compete well with these competitors?

　　Zhan Chunxin: No, there is just one: learn from them.

　　Reporter: You are being modest. You should have your own special approach.

　　Zhan Chunxin: Although the equipment industry is not the same, the principles are the same, or they all have common technologies. These common technologies can be shared by everyone, such as mechanical transmission, materials, hydraulics, electrical, etc. These technologies are all basic, common technologies. Whether it is agricultural machinery extending to construction machinery or construction machinery extending to agricultural machinery, in essence it is the expansion of the industrial chain. Those who make construction machinery will understand construction machinery better and have some expertise, and those who make agricultural machinery also have their expertise. The basic things are the same, and it may require practical experience to explore and then master. Of course, this may just be learning.

　　Reporter: From what we see externally, Zoomlion may have already accumulated a lot of technology. Is it easier to enter the agricultural machinery field?

　　Zhan Chunxin: I think every trade has its own secrets. First of all, you still have to learn and practice. Of course, the basic skills are all here.

　　Reporter: Will the learning in this sector be through cooperation, mergers and acquisitions in the future? Will this method not be ruled out for operating this sector in the future?

　　Zhan Chunxin: Walk on two legs. First, independent research and development, self-development; and second, through mergers and acquisitions, through integration, through the power of capital to make our agricultural machinery grow rapidly.

　　Reporter: Have you envisioned what percentage of revenue this sector will contribute in the future? Do you have this strategic goal?

　　Zhan Chunxin: I think the market size of the agricultural machinery sector is no less than that of construction machinery, and the scale of the environmental industry is also no less than that of construction machinery. Of course, heavy engineering will also be no less than construction machinery in the future. Therefore, if we truly do it and can achieve the four sectors advancing side by side, I think Zoomlion at that time will first not be a cyclical enterprise, and second, it will be an enterprise with considerable scale of development.