FIRST TRACTOR(SH:601038) Huaan Securities·2024-09-26 11:00Investment Rating - The investment rating for the company is "Buy" [1]. Core Views - The company is a leading player in the agricultural machinery sector, with a focus on enhancing profitability and operational efficiency [3]. - The agricultural machinery industry has a broad outlook, supported by government policies and increasing demand for modern agricultural practices [3]. - The company is accelerating its overseas expansion and building core competitiveness through self-manufacturing of key components and optimizing its sales network [3]. Summary by Sections Company Overview - The company has a history of nearly 70 years and has transformed from a government-led enterprise to a market-oriented leader in the agricultural machinery industry [1][3]. - The company has a stable shareholding structure, with the controlling shareholder being a state-owned enterprise [11][15]. Financial Performance - The company reported a revenue of 11,534 million yuan in 2023, with a projected growth to 12,846 million yuan in 2024, reflecting a year-on-year growth of 11.4% [2]. - The net profit attributable to the parent company for 2023 was 997 million yuan, expected to rise to 1,168 million yuan in 2024, indicating a growth of 17.2% [2]. - The company's gross margin is projected to improve from 15.9% in 2023 to 16.4% in 2024 [2]. Industry Outlook - The agricultural machinery market is expected to grow significantly, with the domestic market projected to expand to 610 billion yuan in 2024 [1]. - The global agricultural machinery market size is anticipated to increase from 128 billion USD in 2017 to an estimated 170.8 billion USD in 2023 [1]. Competitive Position - The company has established a comprehensive manufacturing system for tractors, from complete machines to core components, enhancing its competitive edge [3]. - The brand "Dongfanghong" has become a well-known national brand, recognized for its influence and innovation in the industry [16]. Investment Recommendations - The company is expected to achieve revenues of 128.46 billion yuan in 2024, with a net profit of 11.68 billion yuan, reflecting a growth trajectory in the coming years [1][3].