Profit felled sharply! for most Chinese tire companies in 2022.

In 2022, the epidemic will recur, the conflict between Russia and Ukraine will cause global economic turmoil, international big-name tire companies will lay off employees one after another, and the performance of major domestic tire companies will face a huge impact.

Recently, a number of tire companies have released performance forecasts. Some tire companies have achieved profit growth, while some tire companies have experienced a sharp decline in profit.

Linglong Tire expects net profit to decrease by 510 million to 550 million yuan

Linglong Tire expects its annual net profit in 2022 to be 240 million to 280 million yuan, a decrease of 510 million to 550 million yuan compared with the same period of the previous year, a year-on-year decrease of 65% to 70%.

It is estimated that in 2022, the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses will be 150 million to 170 million yuan.Compared with the same period last year, it will decrease by 470 million to 500 million yuan, a year-on-year decrease of 74% to 77%.

Linglong Tire stated that the pre-reduction in performance is mainly due to the decrease in the company’s overall gross profit margin in 2022. There are three main factors:

(1) The impact of rising prices of major raw materials. In 2022, Linglong Tire will be greatly affected by fluctuations in raw material prices, and the prices of major raw materials such as synthetic rubber and carbon black will rise sharply, resulting in higher tire production costs and lower gross profit margins.

(2) Declining demand. First, the demand for supporting equipment has declined. According to the statistics of the China Association of Automobile Manufacturers, from January to December 2022, the production and sales of commercial vehicles will be 3.185 million and 3.3 million, respectively, a year-on-year decrease of 31.9% and 31.2%. The volumes were 723,400 and 767,600, respectively, a year-on-year decrease of 50.68% and 51.23%. Due to the relatively high proportion of all-steel tires supplied by Linglong Tire, it is greatly affected by the decline in production and sales of commercial vehicles. Second, the demand in the replacement market has declined. Affected by the epidemic control, travel and logistics transportation have been affected. In addition, the huge fluctuation of sea freight has affected the shipment of overseas customers, and the market demand has further decreased, which has seriously affected the replacement market.

(3) Affected by repeated epidemics, the company’s subsidiaries have also suspended production to varying degrees, and the attendance rate of employees has declined, and the overall production capacity has been limited.

Huayi Group, the parent company of Double Coin Tire, is expected to reduce by 1.617 billion yuan to 1.817 billion yuan

Huayi Group released the “2022 Annual Performance Prediction Announcement”. According to the announcement, it is estimated that the net profit attributable to shareholders of listed companies in 2022 will be 1.15 billion to 1.35 billion yuan, which will decrease by 1.617 billion to 1.817 billion yuan compared with the net profit of 2.967 billion yuan in the same period last year, a year-on-year decrease of 54.51% to 61.25%.

It is estimated that the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses will be 750 million to 950 million yuan, which will decrease by about 1.67 billion to 1.87 billion yuan compared with the net profit of 2.624 billion yuan in the same period last year, a year-on-year decrease of 63.80% to 71.42%.

Huayi Group also stated that the main reason for the pre-reduction of performance in the current period is that in 2022, affected by the market environment of the chemical industry, the sales prices of the main products acetic acid and acrylic acid dropped sharply, resulting in a sharp drop in operating profit year-on-year.

Giti Tire’s net profit ranges from 292 million to 438 million yuan

The 2022 performance forecast of Giti Tire Co., Ltd. is expected to achieve a net profit attributable to shareholders of listed companies in 2022 of 292 million to 438 million yuan (Note: Giti Tire only discloses part of the performance of listed companies); The net profit of listed company shareholders after deducting non-recurring gains and losses is 25.45 million yuan to 38.18 million yuan.

It is estimated that the operating income in 2022 will be 3.332 billion to 3.682 billion yuan; the estimated operating income after deducting business income not related to the main business and income without commercial substance is 3.301 billion to 3.649 billion yuan.

The main reasons for the changes in Giti Tire’s performance in the current period are as follows: During the reporting period, affected by factors such as the 2022 epidemic and logistics disruptions, the market demand was weak, and the company’s market sales volume decreased by about 5% year-on-year.

The main raw materials of Giti Tire are still operating at a high level, and the average cost of raw materials has increased more than the average selling price.

Giti Tire has continuously optimized the market and product structure to reduce the adverse impact of the external environment on the company’s operations and achieve healthy development of the company. During the reporting period, the gross profit margin decreased by about 1% year-on-year. Due to the fluctuation of the US dollar exchange rate and the reduction of loans, financial expenses have decreased, so that the net profit attributable to shareholders of listed companies during the reporting period has not changed much compared with last year.

Double Star Tire expects a net profit loss of 540 million to 670 million yuan

Qingdao Double Star Co., Ltd. issued a performance forecast for 2022. During the reporting period, the net profit loss attributable to shareholders of listed companies was 540 million to 670 million yuan; the net profit loss after deducting non-recurring gains and losses was 600 million to 740 million yuan; Income of 3.8 billion to 4.2 billion yuan; operating income after deductions of 3.7 billion to 4.1 billion yuan.

Doublestar Tire’s performance forecast reduction is mainly due to the impact of the company’s overall gross profit margin reduction in 2022. Due to the epidemic and the shortage of chips, the output of OEMs has been reduced. In 2022, the output of commercial vehicles will drop by more than 30% year-on-year, and road transportation will also drop sharply.

During the reporting period, due to unfavorable factors such as sharp fluctuations in raw material prices, high sea freight rates, conflicts between Russia and Ukraine, and interest rate hikes in the US dollar, the company’s costs and expenses increased, resulting in a loss of net profit attributable to shareholders of listed companies.

Aeolus Tire turned losses into profits, with an estimated net profit of 70 million to 90 million yuan

The performance of Aeolus Tire is expected to have a net profit of 70 million to 90 million yuan in 2022, and the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses is 40 million to 60 million yuan.

It is expected that Aeolus Tire will realize a turnaround in net profit attributable to shareholders of listed companies in 2022 compared with the same period of the previous year.

The improvement in Fengshen Tire’s performance is mainly due to the further increase in product structure and market structure adjustment in 2022, and actively promoting marketing innovation, technological innovation, and management innovation. The proportion of products and markets with better profitability has increased significantly, helping the company to improve its profitability.