First Tractor Company Limited (“First Tractor Company Limited” or “the Company”), which has its H Shares listed on The Stock Exchange of Hong Kong Limited (stock code: 0038) and its A Shares listed on the Shanghai Stock Exchange (stock code: 601038), disclosed that China United Engineering Co., Ltd. (“China United Engineering”) won a public tender for a technical renovation project of the painting line. On February 3, 2026, the Company entered into an Industrial Products Sale and Purchase Contract with China United Engineering for the supply of paint production line process equipment for a total consideration of RMB71,196,390.
According to the announcement, the scope of the contract covers design, procurement, manufacturing, installation, testing, acceptance, and related quality assurance for non-standard equipment, mechanized conveyor systems, robotic paint transfer systems, electrical control systems, auxiliary equipment, and wastewater treatment. China United Engineering’s bid was selected from six participants after obtaining the highest overall score across factors such as technical proposal and project management.
Under the agreement, design completion is scheduled for 30 days from the effective date of the contract, procurement and manufacturing for 135 days, and installation for 90 days following the Company’s notice to proceed with site entry, with final testing to be completed within 60 days thereafter. The payment terms allocate 30% of the consideration as an advance, followed by 30% upon delivery and acceptance, another 30% upon final acceptance, and 10% as a quality assurance deposit to be released after the warranty period.
China United Engineering is a wholly-owned subsidiary of China National Machinery Industry Corporation (Sinomach Group), which holds approximately 88.22% equity interest in YTO Group Corporation (“YTO”). YTO is the controlling shareholder of the Company, accounting for about 48.81% of total issued shares. As China United Engineering is an associate of YTO and hence a connected person of the Company, the transaction is deemed a connected transaction under the Listing Rules. The applicable percentage ratio for this transaction exceeds 0.1% but is below 5%, resulting in reporting and announcement requirements but no need for independent shareholders’ approval.
First Tractor Company Limited operates primarily in the production and sale of agricultural and power machinery, including high-, mid-, and low-powered tractors, diesel engines, and related components. China United Engineering, with a registered capital of RMB120 million, is principally engaged in various engineering-related activities, EPC contracting, manufacturing, import and export operations, and technical services. The financial figures for China United Engineering’s latest accounting year show total assets of RMB16.399 billion, net assets of RMB5.25 billion, operating income of RMB21.439 billion, and net profit of RMB867 million (based on Chinese Accounting Standards).
The announcement indicates that the transaction aligns with the Company’s plans to upgrade its production lines toward higher levels of automation and intelligence. These efforts aim to enhance productivity, improve product quality, and support the Company’s ongoing development in agricultural machinery. The transaction was approved in accordance with relevant procedures, and the Company confirms the terms are set on normal commercial terms and in the interests of all shareholders.
Comments