CICC: "Replacing Humans with Machines" has entered a critical opportunity period, with smart agriculture and agricultural machinery entering the fast lane

According to the Zhitong Finance APP, China International Capital Corporation (CICC) released a research report stating that implementing the strategy of "storing grain in the ground and storing grain in technology," smart agricultural equipment is a key lever, and "replacing humans with machines" has entered a critical opportunity period. With the reduction of agricultural labor and the increase in industrial demand brought about by land transfer, policies have elevated smart agriculture and intelligent agricultural machinery to a new strategic height. The leading smart agricultural equipment companies, based on China's national and agricultural conditions, have entered a fast track relying on mature leading technologies, more practical agricultural services, and a more complete ecosystem.

CICC's main points are as follows:

Smart agricultural equipment is the core lever for food security, resonating with industrial and policy opportunities. 1) Ensuring food security, storing grain in the ground provides the foundation, and storing grain in technology contributes flexibility: The 2025 Central Document No. 1 lists "intelligent agricultural machinery and smart agriculture" as part of "new quality productivity in agriculture," with smart agricultural equipment being the core lever; 2) Intelligent agricultural machinery and agricultural drones are the core tracks: There is significant room for technological upgrades in smart tractors and harvesters; agricultural drones are a Chinese-style agricultural machine that fits the characteristics of "large country with small farmers" and "high proportion of short-stature crops" in China. In 2024, the scale of China's agricultural machinery/agricultural drones is approximately 300 billion/29 billion yuan.

Population urbanization, technological breakthroughs, and policy support make "replacing humans with machines" imperative. 1) Population: The reduction of rural labor and rising costs, along with declining equipment costs, indicate that the industrialization inflection point for replacing humans with machines has arrived. The mechanization rate of the "management" link in China's "plowing, planting, managing, and harvesting" is the lowest; it is estimated that plant protection drones could help China save over 100 billion yuan in annual spraying costs; 2) Technology: Traditional agricultural machinery is transitioning to larger, high-end, and intelligent models, with the penetration rates of high-horsepower, power-shifting, and intelligent tractors in 2024 being 10.7%/3.7%/3.8%; 3) Policy: Agricultural machinery subsidy policies are tilted towards superior machines, with China's agricultural machinery purchase subsidies expected to rebound to a historical high of 24.6 billion yuan in 2024, with a CAGR of 10% from 2020 to 2024.

Based on China's national and agricultural conditions, leading smart agricultural equipment companies build technology foundations, refine services, and connect ecosystems to create an integrated smart agricultural ecosystem. Landscape: High technical barriers, deep service moats, and strong ecological stickiness, with the CR3 of China's agricultural drones/intelligent agricultural machinery/agricultural machinery in 2024 being 88%/71%/48%.

Risks

Research and innovation may fall short of expectations, low grain prices, and intensified industry competition