*ST Xingnong: Old Area Revitalization Plan Has Positive Impact on Agricultural Machinery Business but Carries Uncertainty

Investor Question:

The country supports the construction of advantageous characteristic industrial clusters, modern agricultural industrial parks, and strong agricultural towns in eligible geming old revolutionary areas, enhancing capabilities in agricultural product processing, storage, and preservation. It also promotes the implementation of “Digital Commerce Boosts Agriculture,” strengthening the construction and renovation of county-level logistics distribution centers and township logistics stations. Do these revitalization plans for old revolutionary areas have a positive impact on the company’s main business?

Secretary of the Board Response (*ST Xingnong (Rights Protected) SH603789):

Dear investor, one of the company’s main businesses is the research, production, and sales of agricultural machinery, covering all mechanized processes from plowing, planting, management, harvesting, to post-harvest processing. The support policies and related system capacity building introduced by the state will promote the scaling, standardization, and mechanization of agricultural production, directly driving the demand for various agricultural machinery equipment. This will help expand application scenarios for agricultural machinery products and market space. Coupled with supporting policies and subsidies for related industries, these measures will positively influence the development of the main business of all agricultural machinery companies, including ours. The company also notes related risks: regional differences and uncertainties in policy implementation, coverage, and subsidy intensity; increased competition in the agricultural machinery industry; potential market dispersion and infrastructure imbalance in old revolutionary areas, which may affect the expansion and profitability of agricultural machinery business; and whether the relevant policy benefits can be effectively converted into actual performance remains uncertain. Investors are advised to be aware of risks, invest rationally, and thank you for your attention!

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