601038 (First Tractor Co Ltd) vs Shanghai Composite Comparison

601038

Shanghai Composite

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601038

Shanghai Composite

Difference

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601038

Shanghai Composite

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Compare the stock's returns with its benchmark index and competitors. Gain insights into its relative performance over time.

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Shanghai Composite

601038

CNHI

6326

TTC

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First Tractor Co Ltd
Glance View

Market Cap

10.1B CNY

Industry

Machinery

In the heart of China’s industrial machinery landscape, First Tractor Co Ltd stands as a testament to transformation and growth in modern agriculture and construction sectors. Established initially to bolster the nation’s post-revolution agricultural efficiency, the company has robustly evolved, intertwining its fortunes with China’s rapidly advancing economic goals. First Tractor, a key subsidiary of China National Machinery Industry Corporation (SINOMACH), weaves together rich strands of manufacturing prowess and innovative engineering. Its operations predominantly focus on producing tractors, engines, and combine harvesters, which are crucial for modernizing farming practices. Through extensive research and development, the company continually refines its product line to address the specific needs of large-scale agricultural operations. This focus on innovation ensures that First Tractor products remain competitive not only in domestic markets but also in global arenas, where demand for efficient, high-powered agricultural machinery is rising. As a leader in the manufacturing of large and medium-size tractors, First Tractor Co Ltd’s business model revolves around a strategic blend of mass production and technological advancement. Revenue streams largely stem from the sale of these agricultural megatools and the engines that power them, facilitated through a wide network of dealerships and service teams that ensure robust after-sales support. The company further solidifies its market position by leveraging state-of-the-art manufacturing practices combined with competitive pricing strategies, a critical component to capturing a significant share of the market not just in China, but across developing countries where agricultural mechanization is crucial for economic advancement. Continuous investments in cutting-edge technologies and improvements in production processes underscore First Tractor's commitment to quality and efficiency, allowing the company to maintain its formidable reputation in the agricultural machinery industry. Through these finely tuned operational strategies, First Tractor Co Ltd catalyzes agricultural productivity, serving as a backbone resource for farmers worldwide striving for greater efficiency and yield.

View First Tractor Co Ltd Analysis

Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

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US	Deere & Co NYSE:DE	Select
UK	CNH Industrial NV MIL:CNHI	Select
JP	Kubota Corp TSE:6326	Select
US	Toro Co NYSE:TTC	Select
US	AGCO Corp NYSE:AGCO	Select
IN	Escorts Kubota Ltd NSE:ESCORTS	Select
SE	Husqvarna AB STO:HUSQ B	Select
TR	Turk Traktor ve Ziraat Makineleri AS IST:TTRAK.E	Select
US	Lindsay Corp NYSE:LNN	Select
IT	Comer Industries SpA MIL:COM	Select

US	Deere & Co NYSE:DE	Add
UK	CNH Industrial NV MIL:CNHI	Add
JP	Kubota Corp TSE:6326	Add
US	Toro Co NYSE:TTC	Add
US	AGCO Corp NYSE:AGCO	Add
IN	Escorts Kubota Ltd NSE:ESCORTS	Add
SE	Husqvarna AB STO:HUSQ B	Add
TR	Turk Traktor ve Ziraat Makineleri AS IST:TTRAK.E	Add
US	Lindsay Corp NYSE:LNN	Add
IT	Comer Industries SpA MIL:COM	Add

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601038

vs

Shanghai Composite

Stocks Performance
601038 vs Shanghai Composite

Performance Gap
601038 vs Shanghai Composite

Performance By Year
601038 vs Shanghai Composite

Competitors Performance
First Tractor Co Ltd vs Peers

First Tractor Co Ltd
Glance View

Company

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601038 vs Shanghai Composite

Stocks Performance 601038 vs Shanghai Composite

Performance Gap 601038 vs Shanghai Composite

Performance By Year 601038 vs Shanghai Composite

Competitors Performance First Tractor Co Ltd vs Peers

First Tractor Co Ltd Glance View

Company

Help

Tools

Stocks

601038

vs

Shanghai Composite

Stocks Performance
601038 vs Shanghai Composite

Performance Gap
601038 vs Shanghai Composite

Performance By Year
601038 vs Shanghai Composite

Competitors Performance
First Tractor Co Ltd vs Peers

First Tractor Co Ltd
Glance View