“The hydrogen tractor is a conceptual model.” On the afternoon of April 6, First Tractor Company Limited(601038) general manager Liu Jiguo commented on the hydrogen tractor at the performance presentation meeting, “limited by various conditions, it is still a long time before commercialization can be realized.”
In the 2021 annual report disclosed by First Tractor Company Limited(601038) disclosure, the 21st Century Business Herald reporter did not find any introduction to “hydrogen energy”.
In 2021, First Tractor Company Limited(601038) achieved an operating revenue of 9.334 billion yuan, a year-on-year increase of 23.10%; The net profit attributable to the parent company was 438 million yuan, a year-on-year increase of 56.42%.
According to the data of Agricultural Machinery Industry Association, in 2021, the sales volume of large and medium-sized tractors of key enterprises in the industry was 315000, with a year-on-year increase of 3.62%. First Tractor Company Limited(601038) in 2021, as the “First Tractor stock”, achieved 69400 large and medium-sized tractor sales, with a year-on-year increase of 29.55%, 25.93 percentage points higher than the overall level of the industry.
However, the 21st Century Business Herald reporter noted that First Tractor Company Limited(601038) last year’s fourth quarter performance loss, that is, the operating revenue was 1.068 billion yuan, but the net profit attributable to the parent company was only -231 million yuan.
First Tractor Company Limited(601038) staff once said in response to the media, “the company’s tractor product sales have obvious seasonality, agricultural machinery is closely related to agricultural planting, the fourth quarter is the off-season of production, and the company is basically in a state of loss in the fourth quarter of each year.”
More importantly, First Tractor Company Limited(601038) last year’s gross profit margin of agricultural machinery business was 14.28%, a year-on-year decrease of 3.54 percentage points; The gross profit margin of power machinery business was 12.64%, a year-on-year decrease of 0.50 percentage points.
In response, First Tractor Company Limited(601038) Financial Director Su ye said at the performance presentation meeting on April 6 that the main reason was that “during the reporting period, the transportation expenses were reclassified into the operating costs. At the same time, due to the impact of China’s external environment and epidemic situation, the market price of raw materials rose sharply. The company actively carried out design cost reduction, material price locking, band procurement and other work, which to some extent curbed the impact of rising material prices on the gross profit margin.”
In December 2022, the “national four” standard switching of non road mobile machinery will be officially implemented. The rise in manufacturing and purchase costs caused by the “national four” switching will have a certain impact on users’ purchase intention, and the uncertainty at the market demand side will increase.
In this regard, Liu Jiguo told investors at the performance briefing that at present, the company has not received the information of time change, “the company is fully ready for the switching of ‘National four’ products; there are many factors affecting market sales in the future, and there is a certain uncertainty in sales volume.”
He also said that after the “national four” switch, the engine cost will increase and the price will be adjusted accordingly. “The company will actively take cost reduction measures and strive to reduce the impact on end users.”
As for the impact of gross profit margin, Su ye said at the performance briefing that on the one hand, the upgrading of “national four” products that meet the national environmental protection requirements directly affects the costs of materials and processes, on the other hand, the sales of “national four” products are affected by various factors, and their profitability may be challenged to some extent. “The company will improve its profitability through a series of cost control measures.”
In response to the “cooperation with Huawei” that investors are concerned about, Liu Jiguo said that the controlling shareholder of the company, China YITUO Group, has carried out relevant cooperation with Huawei in platform construction and server procurement. “In the future, we will further cooperate in the fields of intelligent agricultural machinery and Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816) according to business needs. First Tractor Company Limited(601038) as a listed company of agricultural machinery business under China YITUO Group, we will actively participate in intelligent agricultural machinery and other projects related to the company’s business.”
According to the data disclosed by the National Bureau of statistics on March 30, in February 2022, the cumulative total output of tractors was 99813, of which the cumulative output of large tractors was 17501, a year-on-year increase of 19%; The cumulative output of medium-sized tractors was 58312, a year-on-year increase of 3.5%; The cumulative output of small tractors was 24000, a year-on-year decrease of 14.3%.
“We believe that with the adjustment of the national agricultural production structure and the continuous expansion of the business scale of farmers, as well as the full implementation of the national food security strategy, the upward trend of the tractor industry will continue, and the sales are expected to maintain a growth trend.” A researcher in the construction machinery industry of a securities firm told the 21st Century Business Herald that intellectualization leads the revolution of agricultural production efficiency. This process may take time, but the trend is clear. “With the tractor sales in the first two months of this year, especially the growth of large tractors exceeding expectations, it is expected that the continuous growth of the industry is a high probability event.”
For the future business plan, First Tractor Company Limited(601038) in the 2021 annual report, the company said that in 2022, the company will adhere to the strategic development ideas of “seeking progress while maintaining stability” and “the 14th five year plan”, grasp the changing trend of industrial development and competition pattern, focus on the business ideas of “seizing opportunities, improving capacity, coping with the situation and stabilizing growth”, accelerate scientific and technological R & D innovation and product technology breakthrough and upgrading, and further integrate into the new development pattern, Promote the steady operation and sustainable development of the company. “First, deeply cultivate the market and strive for a steady increase in market share; second, reduce costs and increase efficiency and broaden the space for improving quality and efficiency; third, pay close attention to key points and lay a solid foundation for transformation and upgrading.”
In the secondary market, First Tractor Company Limited(601038) ‘s share price performance was average, falling 2.41% to close at 11.73 yuan on April 6, and the share price has fallen 16.75% since this year.
