Type and function of tire

1. Senqilin: high-end tire "intelligent manufacturing" leader, overseas base has fallen three

The company is a high-end tire "intelligent manufacturing" leader, 23-25 years three overseas bases have been put into production, capacity continued to expand. The company's tire positioning is high-end, the products are mainly exported, pay attention to intelligent manufacturing and global layout, and create a full range of competitiveness. The company's tire positioning is high-end, and it cooperates with "ice and snow tire king" Nuoji in the core and most high-end tire field of Nuoji, and the company's aviation tires can supply domestic large aircraft, breaking the monopoly situation of foreign tires. The company's intelligent manufacturing level has a demonstration effect in the industry, and the first phase of the Thai project has reached the top level of intelligent manufacturing in the global tire industry, and the second phase of Thailand is expected to be further upgraded. The company carries out a global business layout and has sufficient growth momentum. There are two production bases in Qingdao and Thailand, and the second phase will be put into operation in Thailand in 2022. In 2022, the total designed annual production capacity of the company is 28 million (actual production capacity is less than 28 million), and Qingdao and Thailand bases are carrying out capacity mining and capacity climbing. The company has launched projects in Spain and Morocco, and further expanded overseas production capacity. It is expected that in 2023-2025, the company will have the actual production capacity of half steel tires of 28.5 million, 33 million and 39 million, the production capacity increases of 30%, 16% and 18%, and the production capacity of full steel tires of 1 million, 1 million and 2 million, respectively. In addition, the company has a small batch production and marketing capacity for aviation tires, the product system is further improved, and the future will have a production capacity of 80,000 aviation tires.

Operating income continued to increase, the net profit of the mother increased significantly. In terms of operating income, the company's operating income continued to grow from 2018 to 2023H1, and the operating income reached 3.537 billion yuan in 2023H1, an increase of 11.96%. In terms of maternal net profit, the company's maternal net profit maintained a rapid growth from 2018 to 2020, and declined in 2021, mainly due to the global epidemic repeatedly blocked shipping, the price of raw materials rose sharply, and the United States' "double reverse" landing of origin tires such as Thailand. In the first half of 2023, the company achieved a maternal net profit of 606 million yuan. An increase of 26.90% year-on-year.

Racing tires: Multi-category & global layout, liquid gold shapes long-term growth

2. The company has complete tire categories, global forward-looking layout, and is the leader of domestic tire manufacturing. The company has built a full-category tire production line for semi-steel tires, all-steel tires and off-highway tires, and opened a global layout in R & D, production and sales. The multi-category product layout and global operation layout have established significant competitiveness for the company in market and tariff risk diversification, profitability and steady operation ability improvement. According to the interactive Q&A and the semi-annual report of 2023, the company has a modern tire production base in Qingdao, Dongying, Shenyang and Weifang in China. The company's leadership has a long-term strategic vision and took the lead in overseas layout in 2012. At present, there are two production bases overseas in Vietnam and Cambodia. As of December 31, 2022, the company has a full steel tire production capacity of 11.95 million, half steel tire production capacity of 51.6 million, off-highway tire production capacity of 124,600 tons. The company continues to expand production capacity, full of growth, is expected in 2023 the company's full steel tire production capacity will reach 15.4 million, half steel tires will reach 68 million, road tire production capacity will reach 176,900 tons, respectively, an increase of 29%, 32% and 42%. By then, the company's leading position in domestic tire production capacity will be further consolidated. In addition, the company has R & D centers in China, North America, Vietnam and Europe; In North America, Europe, Asia and other places to serve the local and surrounding regions of the sales network and logistics center, established a global marketing network, products have been exported to more than 180 countries and regions overseas.

Performance continues to hit new highs, and equity incentive plans demonstrate confidence in long-term development. In 2022, the company achieved double growth in operating revenue and profit, and the annual operating income exceeded 20 billion yuan, hitting a record high. In the first half of 2023, the company achieved operating income of 11.631 billion yuan, a year-on-year increase of 10.84%, and realized net profit of 1.046 billion yuan, a year-on-year increase of 46.26%. On July 18, the company disclosed the 2023 employee stock ownership plan (draft), the assessment target of the employee stock ownership plan is based on the 2022 net profit of 1.332 billion yuan, and the net profit growth rate from 2023 to 2025 is not less than 30%, 60% and 90%, respectively. The net profit of the corresponding company to the mother is 17.32, 2.31 and 2.531 billion yuan respectively. The equity incentive plan is conducive to the stable operation of the company and demonstrates the confidence in long-term development.

The production of the Cambodia project is expected to continue to boost profitability, and liquid gold tires shape long-term growth. The company's two major overseas bases, Vietnam factory anti-dumping tax rate is zero, countervailing tax rate is 6.23%, Cambodia factory double reverse tax rate is zero, after the Cambodian project is put into operation, is expected to continue to raise the company's overall profitability. The company's liquid gold tire has excellent performance, breaking the "devil's triangle" law that the tire industry cannot take into account the rolling resistance, wet skid resistance and wear resistance of the tire for a long time, and the product is developing to green, low-carbon and sustainable. After TUK Mark certification test, liquid gold tires are comparable to international first-line brands in the key performance of dry braking, wet braking, dry ground control, wetland control, water slip and roll resistance. The company launched a number of liquid gold tire products, and increased brand promotion efforts to promote at home and abroad, widely recognized by customers, shaping the company's long-term growth. In the fourth quarter of 2021, the company launched the liquid gold tire truck series for the first time, and in June of the same year, it launched the liquid gold tire passenger car series in China; In November 2022, the company launched the "ERANGE|EV" product specially developed for passenger electric vehicles in North America. According to the interactive Q&A and the 2023 semi-annual report, since 2023, the company has continued to increase the promotion of liquid gold tires, and launched four series of liquid gold passenger car tires in domestic offline stores, and the market is positive.

3. Guizhou Tire: a leading commercial tire enterprise, the completion of the dual base is ready to go

The company is a leading enterprise of commercial tires, and dual bases at home and abroad have been completed. The company's main products are highway type tires, off-highway tires two categories, truck and bus tires, construction machinery tires, agricultural machinery tires, industrial vehicle tires and special tires five series. The company has two bases in Guiyang and Vietnam, with an existing tire production capacity of more than 9 million, and the domestic Guiyang base, where the company is building an annual output of 380,000 sets of all-steel radial tires, of which the installation and commissioning of some equipment with a capacity of 200,000 units in the first stage has been completed, and is now conducting small batch trial production. The entire project is expected to be completed in October 2024. The company's layout in Vietnam gradually entered the harvest period, Vietnam phase I 1.2 million all-steel radial tire project in the end of the second quarter of 2023 full production, Vietnam Phase II under construction with an annual output of 950,000 high-performance all-steel radial tire project (highway type 800,000, off-highway type 150,000), has been carried out small batch trial production. The Vietnam base has the advantages of low raw material costs and transportation costs, and low tax rate for exports to European and American markets. In the first half of 2023, the Vietnam factory achieved the production of 464,300 tires, sales of 470,300 tires, operating income of 447 million yuan, net profit of 60 million yuan, and net interest rate of 13.35%. This is higher than the company's average net profit rate of 7.72% in the first half of 2023.

Tire production and sales are flourishing, and the performance is growing steadily. From 2018 to 2022, the company's performance increased steadily. In the first half of 2023, the company achieved operating income of 4.441 billion yuan, an increase of 12.45% year-on-year, and realized net profit of 337 million yuan deducted from non-return to mother, an increase of 113.25% year-on-year. The increase in the company's performance was mainly due to the decrease in raw material prices, the increase in tire demand, the increase in sales after the completion of the Vietnam base, and the improvement in the profitability and sales of tire products. In the first half of 2023, the company produced and sold 4,035,200 tires, an increase of 9.04%, and sold 3,939,600 tires, an increase of 14.37%. In terms of profitability, the gross profit margin of the company's tire products increased to 20.80% in the first half of 2023, an increase of 6.04pct year-on-year.

4. Linglong Tire: the "7+5" strategy has been steadily promoted to build a world-class tire brand

Research and marketing global layout, comprehensive lead, to build the world's first-class tire brand. In terms of production layout, the company implements the "7+5" strategic layout (7 domestic factories, 5 overseas factories). In China, the company has five production bases in Zhaoyuan, Dezhou, Liuzhou, Jingmen and Changchun, Shaanxi and Anhui factories are in the early planning, after the completion of the seven domestic production bases, it will fully cover North China, South China, Central China, Southwest, Northwest, Northeast and East China. Overseas, the company has two production bases in Thailand and Serbia, and will continue to investigate and build factories. According to the company's 2022 annual report, the company's existing tire design capacity is 120.56 million, which ranks among the forefront in China, and the production capacity will reach 84.36 million in 2022. According to the company's 2022 annual report, it is expected that in 2023, the expansion of the Dezhou base of 1.2 million sets/year truck and bus tire production capacity, the third phase of the Hubei base of half steel tire production capacity, the first phase of the Jilin base of half steel tire production capacity will be completed, according to interactive questions and answers, the company plans to carry out the Serbia base of half steel tire trial production in September. The company's production capacity is expected to accelerate in 2023-2024. The company's research and development strength is outstanding, the construction of China's first large-scale outdoor comprehensive tire test ground - Central Asia tire test ground, a variety of tire quality performance and technical research in the world's first-class level, has formed a "three countries and seven places" global open R & D innovation system, solid technology accumulation for the company to the international first-class tire brand to provide long-term power. The company has ranked first in China's tire supporting market for many consecutive years, with a total supporting amount of more than 200 million pieces. From 2020 to the first half of 2023, the company is the Chinese tire with the largest share of China's new energy vehicle tires.

Create a new productivity of digital intelligence, and help the company's profitability to a higher level. In 2022, due to the impact of global demand, the company's tire production and sales declined, and the price of major raw materials such as superimposed carbon black increased, resulting in a decline in the company's operating income and net profit withheld from the mother. In the first half of 2023, due to the decline in the price of the main raw materials of tires and the growth of the company's production and sales, the company achieved operating income of 92.37 yuan, an increase of 9.92% over the same period last year, and achieved net profit of 499 million yuan. The company will accelerate the construction of digital intelligence, create a full-field intelligent, full-process automation, all-directional green tire factory, and improve productivity. In May 2023, the Serbian factory obtained a trial license for the first phase of 1.2 million truck tires, and the factory will focus on creating highly intelligent, highly automated, and highly refined intelligent manufacturing capabilities, combined with high-quality products and more efficient delivery capabilities. To be shipped, the product will become a new engine for the company's production and sales revenue growth and profit growth, and improve the company's overall market share and profitability.