FIRST TRACTOR(SH:601038) Soochow Securities·2024-10-31 19:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is experiencing short-term pressure on performance but is expected to benefit from long-term growth opportunities driven by the trends of large-scale and high-end agricultural machinery [2] - In Q1-Q3 2024, the company achieved revenue of 10.74 billion yuan, a year-on-year increase of 4.7%, and a net profit attributable to shareholders of 1.10 billion yuan, a year-on-year increase of 1.4% [2] - The company’s sales gross margin for Q3 2024 was 14.7%, down 3.6 percentage points year-on-year, primarily due to increased promotional efforts in a declining market [2] - The company is positioned as a leading high-horsepower tractor manufacturer, benefiting from the dual trends of industry large-scale and high-end development, as well as successful overseas market expansion [2] Summary by Sections Financial Performance - For Q3 2024, the company reported revenue of 2.93 billion yuan, a decrease of 2.4% year-on-year, and a net profit of 200 million yuan, a decrease of 40.9% year-on-year [2] - The company’s revenue forecast for 2024-2026 has been adjusted to 1.061 billion, 1.220 billion, and 1.432 billion yuan respectively, with corresponding P/E ratios of 17, 14, and 12 times [2][8] Market Position - The company is a top player in the high-end large-horsepower tractor market, with a significant increase in the proportion of large tractors sold, indicating a clear trend towards larger machinery in the industry [2] - The company’s overseas revenue has grown at a CAGR of 35.41% from 2019 to 2023, focusing on markets in the Russian-speaking regions, South America, and Asia [2] Future Outlook - The company is expected to benefit from the recent increase in the minimum purchase price for wheat, which may boost market confidence in grain prices [2] - The internal demand structure for large and medium tractors is continuously optimizing, positioning the company to benefit from the ongoing trend towards larger agricultural machinery [2]