Domestic tire leading enterprises, to build a world-class brand

1. The domestic tire industry leader, and strive to build a world-class enterprise

1.1. Business Overview: Leading enterprises in the domestic tire industry steadily promote the "7+5" strategy

Based on the tire industry, and strive to build a world-class enterprise. The company is mainly engaged in tire research and development, manufacturing and sales. The company's main products include passenger and light truck radial tires, truck and bus radial tires and off-highway tires, which are widely used in passenger cars, commercial vehicles and construction machinery vehicles. The company's main brands include "Linglong", "Leo", "ATLAS", "EVOLUXX", etc. The products are sold to 173 countries around the world, and provide supporting services for more than 60 O&M factories around the world, such as Volkswagen, Audi, BMW, GM, Ford, Honda, etc., especially in the field of new energy supporting the company's overall market share ranks first among Chinese tire enterprises. We will steadily advance the "7+5" strategy and accelerate globalization. In order to promote the high-quality layout of the company's global industry and enhance the company's core competitiveness in the international market, the company steadily promotes the "7+5" global strategic layout (that is, 7 production bases in China and 5 overseas production bases). At present, the company has five production bases in Zhaoyuan, Dezhou, Liuzhou, Jingmen and Changchun in China, and plans to build two other production bases in Shaanxi and Anhui. It has two overseas production bases in Thailand and Serbia, and continues to investigate and build factories around the world to continue to develop the global tire market.

The production capacity of each base is steadily expanded to ensure the long-term growth of the company. According to the company's annual report for 2022, the company's design capacity of pre-tire is 120.56 million sets, the production capacity is 84.36 million sets, and the capacity utilization rate reaches 78%. At present, the company's Dezhou base expansion of 1.2 million sets/annual production capacity, Hubei base phase III half steel capacity, Jilin base phase I half steel capacity is expected to be completed in 2023, Serbia base is expected to start trial production in 2023. As the new production capacity of the company's bases continues to be released, the company's long-term growth is guaranteed.

Multi-brand common development, supporting and retail parallel. The company implements a diversified brand strategy, and has built brands including "Ling Long", "Leo", "ATLAS", "EVOLUXX", "GREEN MAX", "CROSS WIND" and so on. The company insists on matching and retail abreast. In terms of supporting, the company has provided supporting services for more than 200 production bases of more than 60 Oems in the world such as Volkswagen, Audi, BMW, GM, Ford and Honda, and entered the supporting system of 7 of the world's 10 largest car companies, ranking first in domestic tire supporting for many consecutive years. In addition, the company currently occupies a leading position in the field of new energy, is China's leading new energy vehicles SAIC General Wuling, BYD's largest tire supplier, in 2022, the company's new energy vehicle tire supporting more than 6 million, new energy tire supporting the overall market share of more than 22%, ranking first in China's tire enterprises. In terms of retail, the company put forward the "new retail" strategy to achieve a full-coverage sales network system on all continents, and its products are sold to 173 countries in the world.

1.2. Ownership structure: The ownership structure of the company is concentrated, and the Wang family is the actual controller

The ownership structure of the company is concentrated, and the Wang family is the real controller. As of March 31, 2023, the controlling shareholder of the company is Linglong Group Co., LTD., with a shareholding ratio of 39.94%. The second largest shareholder of the company is Intl Trading Limited, which holds 13.64% of the company's equity. The actual controllers of Linglong Group and Yingcheng Trading are Wang Xicheng, Wang Feng, Wang Lin and Zhang Guangying, and the Wang family indirectly holds 53.58% of the shares of the company through Linglong Group and Yingcheng Trading, and is the actual controller of the company. The company's ownership structure is concentrated, and the actual controller has strong control over the company.

1.3. Financial analysis: Profits have been under pressure in the past two years, and 23Q1 shows a recovery trend

In the past two years, the company's revenue and performance have been under pressure, and 23Q1 has recovered well. Benefiting from the development of the downstream automobile market and the rapid expansion of the company's own production capacity, the company's revenue scale and performance will grow steadily before 2020. After 2020, the company's revenue scale and performance are under pressure due to factors such as the epidemic suppression of demand, rising sea freight, and rising raw material prices. In 2022, the company achieved operating income of 17.06 billion yuan, down 8.47% year-on-year; The net profit returned to the mother was 292 million yuan, down 63.03% year-on-year. 2023Q1 The company's performance was outstanding, achieving a revenue of 4.385 billion yuan, an increase of 0.78%; The net profit returned to the mother was 214 million yuan, an increase of 332.26%.