Interest income on listing proceeds helped lift first-half profit at H share First Tractor but the earnings outlook for the rest of the year remains bleak, according to analysts. The mainland's largest agricultural tractor-maker said it earned net interest income of about 40 million yuan (about HK$37.22 million) on proceeds raised from its listing. The company has about 1.1 billion yuan of cash after spending part of the $1.5 billion listing proceeds. A European brokerage analyst said the interest income translated to about 27 million yuan of after-tax profit, or about 41 per cent of the first-half profit of 65.7 million yuan. The analyst expected the company's full-year results would also rely heavily on interest income, which would make up about 50 to 60 per cent of after-tax profit. At a press conference yesterday, chairman Yin Jiaxi said he expected flooding would help the company as it led to more tractor sales being used for water containment work and this would outweigh the negative impact. He said this, along with government policies to increase investments in agriculture and infrastructure and other food and agricultural reforms, should boost the company's full-year results. But the potential boost had not shown through in figures for this month and last month, he said. Mr Yin said the company was in talks with its parent to buy a 49 per cent stake in Yituo (Luoyang) Construction Machinery this year or early next year. The company earlier bought about 45 per cent of Yituo for about 66 million yuan at a price-earnings multiple of 10 times. The firm would look for investments that provided higher returns than the 10 per cent earned on bank deposits, Mr Yin said. The company is applying to issue 100 million A shares to raise capital for bigger investments.