Profits Jump 50%, The Tire Industry Ushered In A Bright Spring?

- Apr 11, 2019-

On April 1, cylan group co., ltd. issued an announcement, saying that it is expected that in the first quarter of 2019, the company's net profit attributable to shareholders will increase by about 60.177 million yuan compared with the same period of last year, with an increase rate of 50%, in addition, the net profit attributable to non-shareholders will increase even more, to reach about 63.34%.

According to cerun group, the company's quarterly net profit during the reporting period can reach 180.5 million yuan, which is mainly attributed to the improvement of gross profit level of products. In addition, the effective release of production capacity of cerun Vietnam factory is an important driver of cerun's enhanced profitability.

We have learned that ceram group has made it clear in the report that the substantial growth of performance is related to the decline of raw material cost. From the perspective of the whole industry, the natural rubber, the main raw material of tires, is at a stable low level from the whole year of 2018 to the beginning of 2019, and the prosperity of the industry is expected to continue.

At present, a number of listed tire companies have disclosed the performance forecast for the whole year of 2018. Linglong tire, xilun group, pulin chengshan, guizhou tire and fengshen tire and other companies all achieved a substantial increase in profit or turned into profit in the previous year. These companies all explicitly "thanked" the low-priced natural rubber in the preview.

Multiple factors, performance significantly thickened

According to the public content, the average price of the natural rubber market in 2018 was 11,400 yuan/ton, down 21.05% year on year. The profit space of tires was significantly expanded compared with that of 2017. In addition, the output of the main natural rubber producing country in that year also set a new high in many years, and the natural rubber market as a whole was in a situation of oversupply.

On the policy level, the state has increased the export tax rebate rate of enterprise products and the tax deduction rate of research and development expenses, which has played a great role in enhancing the performance of enterprises. In addition, the devaluation of RMB is also beneficial to the export of enterprises and the overseas competition of products to a certain extent.

Overseas local enterprises will have obvious advantages

The industry pointed out that Europe and the United States is the main export market of China's tire enterprises, but at present these regions have set trade barriers to China, if the enterprise did not carry out international product layout, will still face greater export pressure.

At present, the concentration ratio of China's tire industry is still lower than that in the international market, but under the influence of trade war, with the increase of industrial operation pressure, enterprises with scale advantages and preemptive overseas layout will get greater development.