CIDI will provide autonomous mining trucks and related technology to the UK mining equipment company MMD Group to expand into international markets.
<h4>Key Points:</h4>
<ul>
<li>CIDI announced a partnership with the UK MMD Group to provide autonomous mining trucks and related technology.</li>
<li>This collaboration comes as CIDI attempts to move beyond the Chinese domestic market and diversify its business, while fierce local competition continues to compress its profit margins.</li>
</ul>
Yang Ge
In December last year, CIDI became the first listed company among China's new generation of autonomous mining truck manufacturers, setting a historical precedent. Now, CIDI Technology Co., Ltd. (3881.HK) has achieved another milestone through this partnership, which is expected to further expand its reach beyond the Chinese market, where it currently derives nearly all of its revenue.
The market reacted positively to the company's announcement last week of its collaboration with UK mining equipment manufacturer MMD Group Ltd. The day after the news was released, CIDI's stock price rose by 5%. MMD is a relatively niche player in the vast global mining equipment market, primarily focusing on mineral screening and crushing equipment (i.e., crushers) and feeding equipment. Nevertheless, this partnership is still seen as a significant endorsement for CIDI, reflecting not only its autonomous electric mining trucks but also its underlying technological strength.
Although autonomous mining trucks represent just a segment of the larger autonomous driving industry, the market size is still considerable. According to third-party data cited in CIDI's listing documents, the market size in China reached 1.9 billion yuan (approximately 278 million USD) last year and is expected to grow to around 40 billion yuan by 2030. The global market size is even larger, which is precisely the direction CIDI aims to target through this collaboration.
Autonomous driving technology is particularly attractive to mining companies because it can significantly reduce the risk of casualties for drivers and other workers during accidents in mining areas, which has also led to strong support from the Chinese government. In 2024, China released documents emphasizing the importance of mining safety and the necessity of accelerating the development of unmanned mining trucks.
Under the latest collaboration, CIDI will provide MMD Group with autonomous systems for its mining equipment automation solutions. At the same time, MMD will be responsible for selling CIDI's core autonomous mining trucks, as well as the scheduling systems and charging infrastructure, providing important channels for this Chinese company to expand into global markets.
CIDI co-founder and executive director Ma Wei stated that this partnership marks an important milestone for the company's autonomous mining technology as it moves into the global market, &#34;This also means that the company is transitioning from being a domestic leader to international implementation.&#34;
However, it should be noted that MMD is relatively small in the global mining equipment sector, with market leaders being Japan's Komatsu Ltd. (6301.T) and American giant Caterpillar (CAT.US). As a private company, MMD has not disclosed financial data on its website.
According to data platform Prospeo, the company's annual revenue is approximately 30 million USD, indicating a relatively limited scale. Its valuation is also modest, around 100 million USD
In comparison, CIDI has a larger scale, with its revenue last year increasing from 410 million yuan in 2024 to 885 million yuan (over 100 million USD), nearly doubling. CIDI's market value is also significantly higher, approximately 1.8 billion USD, with the increase in market value of about 90 million USD resulting from a 5% rise in stock price after the cooperation announcement, which is close to MMD's overall valuation.
Additionally, CIDI only disclosed this cooperation on its company website and did not issue a formal announcement through the Hong Kong Stock Exchange, indicating that it also believes the impact of this cooperation will be limited in the short term.
However, this cooperation can still be seen as an affirmation of CIDI's technology from companies outside of China. It should also be noted that leading companies like Caterpillar and Komatsu have already established their own automation equipment businesses, making it less likely for them to rely on companies like CIDI for technical support.
<h4>Global Expansion</h4>
CIDI is competing with two other Chinese companies, Yikong Zhijia and Bolai Intelligent, in the race to develop autonomous mining trucks and related technology businesses. Both companies have also submitted applications for listing in Hong Kong, with Yikong Zhijia filing at the end of last year and Bolai Intelligent submitting its application in January this year. CIDI was the first to go public in December last year, leading the way in this race, and its stock price has risen about 25% since its listing.
All three companies have received strong support from the capital market, with CIDI's pre-IPO investors including Sequoia Capital China Fund (formerly known as Sequoia China), Baidu, and Legend Holdings; the other two companies have more direct support from the new energy industry chain, with Yikong Zhijia backed by battery leader CATL, while Bolai Intelligent is supported by BYD.
Currently, the business of these three mining truck companies is still primarily focused on the Chinese market. However, CIDI pointed out in its latest cooperation announcement that the company is actively expanding its overseas layout, focusing on markets in Australia, South America, and the Middle East. In the first annual performance report released last month after its listing, the company disclosed that it had received its first significant order outside of mainland China last year, selling 12 mining trucks to a mine owned by Taiwan Cement.
Despite still being in a loss-making state, CIDI's business performance in the Chinese market is impressive. The company delivered 630 sets of autonomous mining solutions last year, more than tripling from 2024, with a cumulative delivery volume reaching 1,500 sets. However, revenue only achieved a doubling growth, which does not match the significant increase in delivery volume, reflecting the pressure the company faces in terms of price reduction while competing for market share.
This pressure has already been reflected in the gross profit margin. The company's gross profit margin fell from 24.7% to 21.4% last year, a decline of more than 3 percentage points. As the company advances its overseas strategy, including this cooperation, it may help support the gross profit margin, as the profitability in overseas markets is usually higher than in the fiercely competitive Chinese market.
While the gross profit margin has declined, CIDI's losses have also significantly widened, with a net loss last year increasing from 581 million yuan the previous year to about 1 billion yuan. Although the adjusted loss is smaller in scale, it has also expanded from 127 million yuan in 2024 to 242 million yuan, nearly doubling
Overall, this cooperation is an important recognition of CIDI's products and technology, and it is also one of the reasons why investors continue to support the company. However, if the gross profit margin cannot be improved and a clear path to profitability is not demonstrated within the next year or two, the future increase in its stock price may gradually be eroded

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CIDI has established a partnership with the UK MMD Group to provide autonomous mining trucks and related technologies, aiming to expand into international markets. This move comes as CIDI seeks to diversify its business, with positive market reactions leading to a 5% increase in stock price. MMD focuses on mineral screening and crushing equipment, and the collaboration is seen as a significant endorsement for CIDI. The market for autonomous mining trucks in China reached 1.9 billion yuan last year and is expected to grow to approximately 40 billion yuan by 2030, indicating substantial global market potential

CIDI partners with UK MMD to open a breakthrough in the international market