9 December 2025 | 11:24PM HKT Equity Research First Tractor (0038.HK) China's food security - Powering China's agriculture modernization; initiate at Buy | 0038.HK | 12m Price Target: HK$14.00 | Price: HK$7.20 | Upside: 94.4% | | --- | --- | --- | --- | | 601038.SS | 12m Price Target: Rmb21.00 | Price: Rmb12.69 | Upside: 65.5% | We initiate on First Tractor, China's largest manufacturer of agricultural tractors (by 2024 sales revenue), at Buy with our 12-m TPs of HK$14.0/Rmb21.0 for H/A-share implying 91%/6 ...

Core Insights - The CFO of John Deere emphasized that technological advancements, rather than regulations, are key to reducing costs for farmers [1][2] - The Trump administration announced a $12 billion farm aid package to support farmers, with $11 billion allocated to the USDA's Farmer Bridge Assistance Program [2][5] - John Deere's "See & Spray" technology can save farmers up to $15 per acre by reducing herbicide use by 60% [6] Group 1: Technological Advancements - The company believes that cutting-edge technology, such as AI weed detection, is essential for helping farmers save money [1] - John Deere is focusing on retrofitting existing machinery to incorporate new technologies at a lower cost [7] - The CFO highlighted the importance of providing financial solutions to meet customer needs [8] Group 2: Government Support and Market Conditions - The $12 billion aid package aims to support farmers facing economic challenges [2] - The Trump administration plans to ease environmental restrictions on machinery to benefit tractor companies like John Deere [5] - There is a noted optimism in the market due to positive trade agreements and purchase commitments, particularly for soybeans [8]

Core Viewpoint - Deere & Company is set to hold its fourth quarter 2025 earnings call on November 26, 2025, at 9:00 a.m. central time, where financial and operational performance will be discussed with analysts and investors [1]. Group 1 - The earnings call will be accessible via the company's website, and a recorded version will be available for a limited time afterward [2]. - Deere & Company emphasizes its long-standing role in supporting global food, fiber, fuel, and infrastructure production, highlighting its historical roots and ongoing innovation across various sectors [3]. Group 2 - The company has announced key leadership changes as part of its Smart Industrial Strategy aimed at delivering intelligent solutions [5].

Core Insights - Deere & Company is experiencing ongoing sales pressure due to persistently low crop prices, which are causing farmers to delay significant purchases of tractors and combines [1] Group 1: Company Performance - The overall macroeconomic weakness is impacting Deere's sales, as farmers remain cautious in their spending [1] Group 2: Market Conditions - Low crop prices are a significant factor keeping farmers on the sidelines, affecting their purchasing decisions for high-value agricultural equipment [1]

Core Insights - Deere & Company is experiencing ongoing sales pressure due to persistently low crop prices, which are causing farmers to delay significant purchases of tractors and combines [1] Company Summary - The company is facing macroeconomic challenges that are impacting its sales performance [1] Industry Summary - The agricultural equipment industry is currently affected by low crop prices, leading to reduced spending from farmers on large equipment [1]