First Tractor chairman Yin Jiaxi yesterday confirmed analysts' forecasts of a drop in profit this year due to slackening demand. Speaking in Hong Kong, he said the H-share company, the mainland's largest agricultural tractor-maker, was still profitable despite the industry being in the doldrums. 'Improvement is expected in the fourth quarter but it is difficult to tell if the second-half performance can make up the shortfall in the first half,' he said. 'We may expect to see a return of last year's performance next year.' Mr Yin said the company had sufficient capital, with more than two-thirds of last year's listing proceeds of about $1.5 billion, for development and expansion. The company's shares have recently been under pressure as some brokerages downgraded their earnings forecasts. One analyst said a sharper than expected decline in unit sales and prices had been seen since April. He downgraded the stock to a long-term buy and cut his own net profit forecast by 30 per cent to about 200 million yuan (about HK$187 million) this year. He forecast the company, which made a profit of 282 million yuan last year, would make a first-half profit of about 90 million yuan, thanks to cost control measures which were saving about 40 million yuan. The analyst said the company was expected to report a 34 per cent fall in unit sales of large tractors - its bread and butter - with flat prices. Small tractors saw unit sales down 13 per cent in the first quarter and 15 per cent for the first half while prices slid 4 per cent in the first quarter and a further 10 per cent in the second quarter, he said. CS First Boston analyst Sam Wong said: '[The company] used to be everybody's favourite, one of the blue chips of all the H shares because it had the agricultural sector story,' but added tractors were not selling as well as expected.