Currently, spring farming across the country is nearing its end.
The reporter learned in Guangdong, Anhui and other places that agricultural machinery loans have become one of the fastest growing areas of agricultural loans since this year, showing that the level of agricultural mechanization in China continues to rise. According to the data, since this year, the agricultural machinery loan balance of the Agricultural Bank has increased by more than 50% compared to the beginning of the year, making it one of the fastest growing areas of agricultural loans.
The General Administration of Financial Supervision also proposed that this year, it is necessary to increase the issuance of credit loans to new agricultural operators and farmers to raise the level of financial services in rural areas.
According to the Chinese Government Network, in 2024, the Ministry of Finance plans to allocate 24.6 billion yuan in subsidies to support the purchase and application of agricultural machinery, an increase of 4.2% over the previous year.
GF Securities released a research report stating that agricultural machinery products are diverse, the industry space is large, and demand is growing steadily. Agricultural machinery is affected by factors such as farming processes, terrain, and crops, and has various characteristics. After decades of development, agricultural machinery in China has initially entered a mature period. The industry space is large, and demand is growing steadily against the backdrop of increased food security and per capita food consumption. Large-scale equipment updates are expected to drive a new round of renewal and replacement demand, compounded by rapid growth in overseas demand, leading agricultural machinery companies are expected to benefit first.
Agricultural machinery-related enterprises:
First Tractor Co., Ltd. (00038): As a leader in the tractor industry, Yituo Co., Ltd. has a rich product matrix. With years of technology accumulation and channel development, the “Dongfanghong” brand is deeply rooted in the hearts of the people. Product sales and sales are far ahead. Benefiting from policy requirements such as agricultural machinery equipment safety and agricultural machinery equipment renewal, the company's market share is expected to increase further in the future. Over the past three years, the amount of cash dividends for Yituo Shares has increased year by year as performance has increased. According to the disclosure, the company plans to distribute 359 million yuan in 2023, and the dividend amounts from 2021 to 2022 are 131 million yuan and 254 million yuan respectively.
According to data from the General Administration of Customs, China's tractor export value increased from US$477 million in 2020 to US$986 million in 2023, with a compound annual growth rate of 27.4%, and the average export unit price also increased from US$3,658 in 2020 to US$6,709 in 2023;
The company's overseas competitiveness is strong. According to the company's announcement, the company's overseas revenue in 2023 was 980 million yuan, up 37.3% year on year, and has grown rapidly in recent years; according to data from the General Administration of Customs, company announcements and our estimates, the share of the company's overseas revenue in domestic tractor exports increased from 9.9% in 2020 to 14.1% in 2023;
The overseas market space is vast. According to Mordor Intelligence, the global tractor market space in 2023 is estimated to be US$78.98 billion. The company's market share is only 2.1%, and there is plenty of room for growth.