Summary of the Conference Call for Yituo Co., Ltd. Company Overview - The conference call pertains to Yituo Co., Ltd., a company in the agricultural machinery industry, specifically focusing on tractor sales and related products. Key Points and Arguments Sales Performance - In 2024, Yituo's large agricultural tractor sales increased by 2.7% year-on-year to 74,430 units, but sales in April and May 2025 saw a significant decline of nearly 20% due to overall weak industry demand [2][3] - The company achieved revenue of 11.9 billion yuan and a net profit of 920 million yuan in 2024, with Q1 2025 revenue at 4.5 billion yuan and net profit at 529 million yuan [3] Product Development and Market Trends - The company has increased its focus on developing power-shift products, with their share in tractor products around 20%, while power-shift sales account for less than 5% [2][8] - The market share of large horsepower tractors is expected to gradually increase, but the medium horsepower tractor market will still have demand due to China's complex operational environment [10] Pricing and Promotions - Despite good promotion of new products, the overall industry downturn led to price stability, with average prices remaining similar to the previous year due to discount promotions [6][2] Export Strategy - The company aims to focus on exports, with expected overseas revenue of approximately 900 million yuan in 2025, despite a decline in the Russian market [4][19] - The overseas market grew over 20% in Q1 2025, primarily driven by regions outside Russia [15] Inventory Management - Dealer inventories have returned to normal levels, approximately three months' worth, following promotional efforts [4][26] Future Outlook - The agricultural machinery industry is currently in a low growth phase, but government support for agricultural machinery development and food security remains strong [27] - The company does not have specific targets for the next two to three years but anticipates exporting 8,500 to 9,000 units in 2025, with corresponding revenue around 900 million yuan [19] Capital Expenditure Plans - Yituo plans to maintain fixed capital expenditures at around 500 million yuan annually, focusing on high-end intelligent tractor assembly lines and heavy-duty diesel engine production lines [24] Aftermarket Services - The company currently relies on dealers for after-sales service and has no immediate plans to directly enter the aftermarket [4][17] New Product Focus - Future product development will concentrate on high-end intelligent products, including large horsepower tractors and upgrades to existing products to meet rising quality and comfort demands [23][21] Market Conditions - The company is cautious about predicting a market turnaround, emphasizing the need to observe the summer grain harvest and pricing trends in the second half of 2025 [22] Additional Important Information - The company is exploring the integration of other agricultural machinery businesses into the listed company platform but faces challenges due to profitability issues [20] - The development of CVT (continuously variable transmission) technology is ongoing, primarily targeting large state-owned farms, but widespread adoption remains challenging [14]