Friday, July 10, 2020
Martin Hennecke
HKEx Stock Code : 00038 
Corporate Profile
Principally engaged in manufacture and sale of agricultural machinery, manufacture and sale of power machinery, manufacture and sale of other machinery, including forklifts and mining trucks, provision of loans, bills discounting and deposit-taking services.

Business Review - For the year ended December 31, 2012

During 2012, an ongoing sluggish world economy and the decelerated growth of the domestic machinery industry increased the difficulty in business operation. After rapid and continuous growth in recent years, there is limited room for further growth of the tractor industry. Given the impact of the adjustment to the subsidies policy for agricultural machineries and other factors, the overall sales declined to some degree. Confronted with such a complex and grim business environment, the Company timely adjusted its sales tactic based on market changes and proactively pushing forward adjustment to the product mix. With steady economic operation, breakthroughs in major projects, exceptional progress in its key tasks, the Company boosted its comprehensive capabilities in dealing with changing market situations, and continuously maintained its leading position in the hipowered and mid-powered tractors market.

During the Reporting Period, the Company constantly enhanced its capability of sustainable development by effectively pressing ahead with the construction of key research and development projects. In September 2012, the Company mass launched the powershift transmission tractors with complete proprietary intellectual property rights, which marked a significant breakthrough in the research and development and the manufacturing technology of heavy-duty wheeled tractors in the PRC. Meanwhile, our globally advanced and domestically first class pilot trial production base was put into operation. The Company considerably boosted its capability in testing the power range, projects and precision of tractors and diesel engines, which laid a foundation for the Company to consolidate its existing technological advantages and building competitive edges for the future.

During 2012, the provincial government of Henan granted the “Governor Quality Award (省長質量獎)”, the highest honor of quality, to the Company. This is another award on quality received by the Company, which is great assurance on the management standards on quality, and products and services quality of the Company . Furthermore, the Company won the Golden Bauhinia Award – “Listed Company with the Highest Brand Value (最 具品牌價值上市公司)” granted by Ta Kung Pao in Hong Kong, which demonstrated the recognition of the Company by the capital market and would drive the Company to strengthen its connection with the capital market and endeavor to create more value to investors.

The Company also achieved tremendously in capital operation during 2012. In August 2012, the Company completed its initial public offering of A shares which were listed on the Shanghai Stock Exchange, and became the only enterprise in the domestic agricultural machinery manufacturing industry with “A+H” listings. The A share issue would provide strong support for the Company to upgrade its products and adjust the product mix, and offer a critical capital market platform for the Company to further consolidate resources and attain its strategic development target. By the end of 2012, the Company completed the acquisitions of all the equity interests in YTO (Luoyang) Flag Auto-Body Company Limited* (一拖(洛陽)福萊格車身有限公司) (“YTO Flag”) and YTO (Luoyang) Drive Axle Company Limited* (一拖(洛陽)車橋有限公司) (“YTO Axle”) from YTO Group Corporation* (中國一拖集團有限公司) (“YTO”). Equity interest transfer in YTO (Luoyang) Foundry Company Limited* (一拖(洛陽)鑄造有限公司) was also completed in January 2013. It would further enhance the Company's core manufacturing capability and optimize its industrial chain.

During the Reporting Period, the Company kept improving its corporate governance mechanism, and further strengthened the awareness of standardized operation and investor return. Through amendment to the articles of the association of the Company (the “Articles of Association”), the Company clarified the implementation of sustainable and stable profit distribution policy while taking into consideration of sustainable development of the Company and reasonable investor return. During the Reporting Period, the Board further revised and improved the Implementation Rules for the Audit Committee, the Remuneration Committee and the Nomination Committee, based on the actual condition of the Company and the requirements of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the “Listing Rules”).

During the Reporting Period, the re-election of the Board of the Company was completed smoothly. In accordance with the operational need, the management team was replenished and adjusted by the Board. All new Directors and management members of the Company are well experienced and educated in their respective fields and also diligent and conscientious. All our management members and the Directors of the Company are confident in leading the Company onto the track of steady development and bringing more return to our shareholders.

Business Outlook - For the year ended December 31, 2012

Our mission is to stay committed to provide the most valuable packaged solutions to agricultural machineries, and our vision is to become a prominent global supplier of agricultural machineries. The year of 2013 will see our unremitting efforts in achieving this target. The Chinese agricultural machinery industry has been developing rapidly for nearly a decade since 2004, while the coming ten years will still be a golden period for the transformation and upgrade of the agricultural machinery industry. As a leading company in the domestic agricultural machinery manufacturing industry, we have realized agricultural mechanization from certain procedures to the entire process, from field-operating machinery to all-round mechanization, and our agricultural machinery products have evolved from low-end ones to those with high technology content, all of which will provide us huge development opportunities. As a leader in as well as a beneficiary of industry upgrading, we will firmly grasp this opportunity for further growth amid industrial development.

2013 is not only a year of great expectations but also of challenges. The world economy is still mired in-depth correction, with complicated and capricious conditions internationally and declining demands domestically, some in-depth problems and conflicts emerge gradually. Competition in the agricultural machinery industry will also intensify. The tractor industry will enter a phase of “high-end products-focused and moderate growth (高位運行、 溫和增長)”, with fast rising demands for high-end products, and emphasis on adjustment of the product mix. Years of amassed advantages in respect of brand, services, R&D, manufacture and customers give us the confidence to better seize present opportunities, actively tackle various challenges, and continuously promote sustainable development of the Company, so as to bring more stable and sustained returns to our shareholders.

Source: First Tractor Co (00038) Annual Results Announcement
Chairman Zhao Yanshui Issued Capital (shares) 402M
Par Value RMB 1 Market Capitalisation (HKD) 2,127M
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