Goldman Sachs first gives First Tractor a "Buy" rating, expecting to benefit from agricultural modernization transformation

Goldman Sachs recently published a research report, giving First Tractor (00038.HK) its first "Buy" rating with a target price of HKD 14. The report believes that the company is in a favorable position during China's agricultural modernization transformation, able to seize structural growth opportunities in the large-scale and specification upgrades of tractors, while also having long-term export potential.

The firm expects market share to continue concentrating towards industry leaders like First Tractor, which will also lead to its EBIT profit margin doubling over the next five years. Additionally, it anticipates that by 2030, the proportion of export business in revenue will double. Goldman Sachs believes that the downward cycle of tractors, which began in 2023 and will last for three years, will end by 2026, reversing First Tractor's decline, viewing the domestic tractor cycle inflection point as a recent major catalyst