Soochow Securities·2025-04-30 14:05Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's Q1 2025 net profit decreased by 11.66% year-on-year, aligning with market expectations. The revenue for Q1 2025 was 4.56 billion yuan, down 2.1% year-on-year, while the net profit was 530 million yuan, also down 11.7% year-on-year. The decline is attributed to short-term pressure on staple grain prices and a downturn in the tractor industry, with national tractor production in Q1 2025 at 151,000 units, down 7.7% year-on-year. However, the company is expected to see continued growth in performance as domestic grain prices stabilize and overseas channels expand [2][3]. Summary by Sections Financial Performance - In Q1 2025, the company achieved a gross profit margin of 15.9%, a decrease of 1.4 percentage points year-on-year. The net profit margin was 11.9%, down 1.3 percentage points year-on-year, indicating short-term pressure on profitability. The company maintained good control over expenses, with a total expense ratio of 4.17%, a slight decrease of 0.04 percentage points year-on-year [3]. Market Position and Trends - The company is a leading player in the high-end, large-horsepower tractor market and is expected to benefit from the trends of large-scale and high-end agricultural machinery. The domestic market is experiencing a shift towards high-end and large-scale products, with the proportion of medium and large tractors in total production reaching 79.5% in the first quarter of 2025, an increase of 6.4 percentage points year-on-year. The company is also expanding its overseas market presence, with tractor exports in Q1 2025 amounting to 2.13 billion yuan, up 32.1% year-on-year [4]. Future Outlook - The company forecasts a net profit of 1.022 billion yuan for 2025, with a corresponding P/E ratio of 14.56. The expected growth rates for revenue and net profit from 2025 to 2027 are 10.68% and 10.87%, respectively, indicating a positive growth trajectory [1][11].