Investment Rating - The report indicates that the company is a leading player in the domestic tire industry, with a focus on overseas production capacity and improving earnings quality [2][3]. Core Insights - The company has established a significant overseas production capacity, which enhances its profitability due to lower tax rates [2][3]. - The company’s earnings quality has steadily improved, with a notable increase in net profit and revenue in the first half of 2024 [14][24]. - The company has a stable shareholding structure, with the largest shareholder holding 69.63% of the shares [6][8]. Company Overview - The company, Prinx Chengshan Holdings, is headquartered in Rongcheng, Shandong, China, and has been in operation since 1976, focusing on tire design, R&D, manufacturing, and sales [3]. - It has developed production bases in China and Thailand, along with sales centers in China, North America, and Europe, forming a global development layout [3][4]. Financial Performance - In the first half of 2024, the company achieved a revenue of 5.363 billion yuan, a year-on-year increase of 23.74%, and a net profit of 811 million yuan, up 148.04% year-on-year [14][24]. - The gross margin and net margin for the first half of 2024 were 24.62% and 15.08%, respectively, indicating a strong profitability trend [24][25]. Market Position - The company has a significant market share in the domestic tire industry, with a continuous increase in the market share of Chinese tire companies, reaching 17.52% in 2023 [49]. - The company’s sales in the Americas accounted for 33.14% of total sales in the first half of 2024, reflecting its successful expansion into North America [14]. Strategic Initiatives - The company has implemented a differentiated brand strategy with four well-known tire brands: PRINX, Chengshan, Austone, and Fortune [10]. - It has expanded its market presence in North America through partnerships, such as becoming the official tire sponsor for USA Pickleball [12]. Operational Efficiency - The company maintains a high asset turnover ratio of 1.0 and an inventory turnover ratio of 5.4, indicating strong operational efficiency compared to peers [40].

Financial Performance - Revenue for the six months ended June 30, 2024, reached RMB 5,363.4 million, a 23.7% increase year-over-year from RMB 4,336.2 million[9]. - Profit before tax for the same period was RMB 892.3 million, up 148.0% compared to RMB 378.1 million in 2023[9]. - Net profit attributable to shareholders was RMB 811.4 million, representing a 148.0% increase from RMB 327.1 million in the previous year[9]. - The gross profit margin improved to 24.6%, an increase of 7.6 percentage points year-over-year[13]. - Revenue for the reporting period reached approximately RMB 5,363.4 million, an increase of 23.7% year-on-year, with a gross profit of approximately RMB 1,320.5 million, up 60.4%[21]. - The profit attributable to the owners of the company was approximately RMB 811.4 million, reflecting a significant year-on-year increase of 148.0%[21]. - EBITDA for the period was approximately RMB 1,195.3 million, marking an 82.5% year-on-year growth, with an EBITDA margin of 22.3%, up 7.2 percentage points[21][23]. - The company's operating profit for the six months ended June 30, 2024, was approximately RMB 911.3 million, a 120.9% increase from RMB 412.5 million in the same period of 2023[96]. - Total comprehensive income for the period rose from approximately RMB 438.0 million to about RMB 832.7 million, an increase of 90.1% year-on-year, primarily due to a net profit increase of approximately RMB 484.3 million[101]. Assets and Liabilities - Total assets as of June 30, 2024, amounted to RMB 10,654.7 million, compared to RMB 10,028.4 million at the end of 2023[10]. - The company’s total liabilities decreased to RMB 4,575.9 million from RMB 5,251.2 million in 2023[10]. - As of June 30, 2024, the company's cash and cash equivalents amounted to approximately RMB 574.1 million, a decrease of about RMB 151.9 million from RMB 726.0 million as of December 31, 2023[102]. - The company's inventory increased to approximately RMB 1,730.0 million as of June 30, 2024, up about RMB 92.5 million from RMB 1,637.5 million as of December 31, 2023, due to business expansion[104]. - Trade receivables increased to approximately RMB 2,216.7 million as of June 30, 2024, an increase of about RMB 356.4 million from RMB 1,860.4 million as of December 31, 2023, attributed to higher sales revenue[106]. - The company's bank borrowings as of June 30, 2024, were approximately RMB 868.8 million, down from RMB 1,211.3 million as of December 31, 2023[102]. - The current ratio improved to approximately 1.3 as of June 30, 2024, compared to 1.1 as of December 31, 2023[103]. - The capital debt ratio as of June 30, 2024, was 5.1%, down from 8.7% as of December 31, 2023[114]. Market and Sales Performance - In the first half of 2024, China's rubber tire production increased by 10.5% year-over-year, reaching approximately 526 million units[16]. - The domestic automobile ownership reached 345 million vehicles by June 2024, with new energy vehicles accounting for 24.72 million units, a 30.1% increase year-over-year[17]. - The company sold approximately 13.8 million tires during the reporting period, representing a year-on-year growth of 19.3%[21]. - Domestic dealer channel revenue was approximately RMB 1,244.6 million, a year-on-year increase of 10.3%, while international dealer channel revenue was approximately RMB 3,511.9 million, up 28.8%[22]. - International marketing achieved revenue of approximately RMB 3,511.9 million, representing a year-on-year increase of about 28.8% from RMB 2,727.0 million in 2023[42]. - Revenue from direct sales to automobile manufacturers was approximately RMB 606.9 million, up 26.3% from RMB 480.7 million in the same period of 2023, driven by increased supply to medium and heavy-duty trucks and passenger vehicles[44]. - Sales of all-steel radial tires generated revenue of approximately RMB 3,063.1 million, a 10.4% increase from RMB 2,774.8 million, driven by a 10.8% increase in sales volume[80]. - Sales of semi-steel radial tires increased by 47.6% to approximately RMB 2,205.4 million, primarily due to a 24.1% increase in sales volume and a rise in average selling price[80]. Product Development and Innovation - The company launched the "H Load Series" commercial tires, utilizing new technologies to enhance performance for complex domestic transport environments[32]. - The "PRO Premium Series" was introduced, targeting the high-end market with eight new patterns and twelve products, aiming to become a leader in high-end commercial tires[35]. - The company has increased R&D investment in new materials, focusing on bio-based, renewable, and high-performance rubber, enhancing tire safety, durability, and fuel economy[57]. - The company has developed new products including a new type of all-season tire and winter tires, with a total of 429 intellectual property rights obtained, including 21 invention patents[58]. - The company launched 300 new products during the reporting period, including 14 all-steel radial tires and 286 semi-steel radial tires, enhancing its product line and market competitiveness[65]. - The company achieved significant breakthroughs in low rolling resistance technology, with the S01 product reaching the EU label A standard, contributing to energy savings in the commercial vehicle industry[68]. - The company is actively expanding its international market presence with new product launches in North America and Europe, including the introduction of the "Hua Ren PLUS" ultra-high-performance tire[66]. Operational Efficiency and Cost Management - The company implemented 2,025 rationalization suggestions in the first half of 2024, enhancing operational efficiency through Lean Six Sigma projects[25]. - The company optimized its supply chain system using big data analysis to predict market demand and improve procurement efficiency[26]. - The company optimized logistics costs by locking in shipping prices and managing logistics expenses effectively, alleviating cost pressures[41]. - The company has implemented a cost automation system to enhance financial management and decision-making, marking a step towards intelligent financial operations[63]. - The company will continue to optimize its operational efficiency and deepen cost awareness across all levels[78]. Strategic Initiatives and Market Expansion - The company is expanding its international presence by establishing overseas production bases to enhance competitiveness amid rising trade barriers[20]. - The company developed 37 new overseas dealers during the reporting period and launched key new products in overseas markets, enhancing global competitiveness[41]. - The company signed a strategic cooperation agreement with Marangoni, aiming to improve the lifespan of commercial vehicle tires and reduce CO2 emissions[50]. - The company is focusing on digitalization and smart transformation in the tire industry to achieve high-quality development amid global economic challenges[76]. - The company plans to enhance brand influence and sales of mid-to-high-end products in the domestic commercial vehicle tire replacement market[77]. - The company aims to strengthen its presence in weak and blank international markets, focusing on increasing sales of all-steel products[77]. Employee and Governance - The group had a total of 6,252 employees as of June 30, 2024, down from 6,532 employees as of December 31, 2023[138]. - Employee benefit expenses for the six months ended June 30, 2024, were approximately RMB 351.5 million, compared to RMB 316.6 million for the same period in 2023[138]. - The group organized 7 safety training sessions and conducted 77 special drills and 4 emergency drills during the reporting period to enhance employees' emergency response capabilities[131]. - The company has implemented a performance management system and a value-oriented compensation system to align employee remuneration with performance outcomes[138]. - The group has established partnerships with several universities for talent development and training, enhancing its employer brand in the academic community[140]. - The company has adopted a stock option plan to attract and retain key management personnel, granting a total of 35,050,000 stock options under the new plan initiated in 2021[143]. - The company has established an audit committee consisting of three independent non-executive directors to oversee financial reporting and internal controls[187]. - The company has complied with the Corporate Governance Code during the reporting period[182]. Shareholder Information and Dividends - The company has proposed an interim dividend of HKD 0.15 per share, totaling approximately HKD 96 million, expected to be paid around October 23, 2024[184]. - As of June 30, 2024, the controlling shareholders hold a combined 69.63% of the company's issued share capital[180]. - Major shareholder China National Heavy Duty Truck Group holds 54,873,500 shares, representing 8.62% of the company[196]. - Chengshan Group holds 436,600,000 shares, accounting for 68.57% of the company[196]. - Beijing Zhongmingxin Investment Co., Ltd. has a controlling interest in 443,359,500 shares, which is 69.63% of the company[196]. - The company has a significant concentration of ownership, with the top three shareholders controlling over 69% of the shares[196]. Risk Management and Compliance - The company has integrated climate risk management into its overall risk management framework, focusing on both physical and transition risks associated with climate change[131]. - The company is closely monitoring the international economic and political environment to adjust its development strategy for the Thailand tire production base, ensuring stable operations[129]. - The average anti-dumping tax rate applicable to Prinx Thailand's products is 4.95%, following the preliminary ruling from the U.S. Department of Commerce on August 9, 2024, with a final ruling expected in early 2025[125]. - The company is actively participating in anti-dumping investigations to reduce export tax rates, significantly lowering the tax rate for exports to the U.S. since 2019[124]. Future Outlook - The company anticipates a slight decrease in orders due to domestic market conditions and international shipping costs, with strong demand for semi-steel radial tires expected to weaken in the second half of 2024[73]. - The report indicates that there are no significant changes in the governance structure or executive compensation as of June 30, 2024[195]. - The company has not provided specific future guidance or performance outlook for the upcoming quarters[195].

Investment Rating - Buy (Maintained) [1] Core Views - The company achieved significant revenue and profit growth in the first half of 2024, with revenue reaching 5.381 billion yuan, a year-on-year increase of 23.74%, and net profit attributable to the parent company reaching 811 million yuan, a year-on-year increase of 148.04% [2] - The gross profit margin improved to 24.62%, an increase of 5.64 percentage points year-on-year, and the net profit margin reached 15.08%, an increase of 7.56 percentage points year-on-year [2] - The company's tire sales increased by 19.3% year-on-year, with semi-steel tire sales growing by 24.1% and all-steel tire sales growing by 10.8% [2] - The company's production capacity utilization rates are high, with semi-steel tire utilization rates at 97.6% in Thailand and 96.5% in Shandong [3] - The company is expected to achieve a CAGR of 16.3% in net profit attributable to the parent company from 2024 to 2026 [7] Financial Performance - Revenue for 2024E is projected to be 10.878 billion yuan, with a growth rate of 9.35% [8] - Net profit attributable to the parent company for 2024E is expected to be 1.314 billion yuan, with a growth rate of 27.18% [8] - EPS for 2024E is forecasted to be 2.06 yuan, with a P/E ratio of 3.54 [8] - The company's ROE is expected to be 21.58% in 2024E, up from 19.02% in 2023A [8] Production and Capacity - The company's production capacity in Thailand and Shandong is steadily increasing, with all-steel tire capacity at 2 million and 7.4 million units, and semi-steel tire capacity at 10 million and 11.53 million units, respectively [3] - The company completed the optimization and upgrade of the semi-steel radial tire production line in Shandong in Q2 2024, and the third-phase project in Thailand is expected to reach full production by Q4 2024 [3] Market and Industry Trends - Domestic rubber tire production increased by 10.1% year-on-year in the first seven months of 2024, while exports grew by 9.7% [2] - The company is focusing on green and high-performance products, launching 300 new products in the first half of 2024, including 14 all-steel radial tires and 286 semi-steel radial tires [7] Profitability and Cost Management - The company's profitability was less affected by cost pressures in the first half of 2024, with raw material prices increasing by 6.5% in Q2 compared to Q1 [2] - The company implemented price increases in Q1 and Q2 to pass on cost pressures, maintaining strong profitability [2]

研究报告 Research Report 25 Aug 2024 浦林成山 Prinx Chengshan Holdings (1809 HK) 2024H1 净利同比增长 148%，重点项目为公司增长奠定基础 2024H1 Net Profit +148% YoY & Key projects lay the foundation for company growth [Table_yemei1] 观点聚焦 Investment Focus | --- | --- | |-----------------------------------------------|---------------------| | [Table_Info] 维持优于大市 Maintain OUTPERFORM | | | 评级 | 优于大市 OUTPERFORM | | 现价 | HK$7.98 | | 目标价 | HK$9.43 | | HTI ESG | 5.0-5.0-5.0 | E-S-G: 0-5, (Please refer to the Appendix for ESG comments) | --- | -- ...

Group 1 - Key Point 1: The company emphasizes the importance of cautious investment decisions for investors [1] - Key Point 2: The meeting introduces key executives including the Executive Vice President, Chief Financial Officer, and Investor Relations Officer [1] Q&A Session All Questions and Answers Question: Who are the key executives participating in the conference call? - The conference call features the Executive Vice President, Chief Financial Officer, and Investor Relations Officer [1]

Financial Performance - For the six months ended June 30, 2024, the company reported revenue of RMB 5,363,381 thousand, a 23.7% increase from RMB 4,336,159 thousand in the same period of 2023[11]. - The profit before tax was RMB 892,300 thousand, compared to RMB 378,064 thousand in the previous year, reflecting a significant increase of 135.5%[11]. - The net profit for the period was RMB 811,426 thousand, up from RMB 327,136 thousand, marking a year-on-year growth of 148.5%[11]. - Revenue for the reporting period reached approximately RMB 5,363.4 million, an increase of 23.7% year-on-year, with a gross profit of approximately RMB 1,320.5 million, up 60.4%[16]. - The profit attributable to the owners of the company was approximately RMB 811.4 million, reflecting a significant year-on-year increase of 148.0%[16]. - The EBITDA for the period was approximately RMB 1,195.3 million, marking an 82.5% year-on-year growth, with an EBITDA margin of 22.3%, up 7.2 percentage points[16]. - The group's operating profit for the six months ended June 30, 2024, was approximately RMB 911.3 million, a 120.9% increase from RMB 412.5 million in the same period of 2023[61]. - The net profit for the reporting period increased by RMB 484.3 million (or 148.0%) to approximately RMB 811.4 million, compared to RMB 327.1 million for the six months ended June 30, 2023[63]. - Total comprehensive income for the reporting period rose to approximately RMB 832.7 million, a 90.1% increase from RMB 438.0 million in the previous year[65]. Assets and Liabilities - Total assets as of June 30, 2024, reached RMB 10,654,682 thousand, an increase from RMB 10,028,405 thousand in the same period of 2023[11]. - The company’s total liabilities decreased to RMB 4,575,892 thousand from RMB 5,251,225 thousand year-on-year, indicating improved financial health[11]. - The group's cash and cash equivalents as of June 30, 2024, were approximately RMB 574.1 million, a decrease of RMB 151.9 million from RMB 726.0 million as of December 31, 2023[66]. - The group's inventory increased to approximately RMB 1,730.0 million as of June 30, 2024, up by RMB 92.5 million from RMB 1,637.5 million as of December 31, 2023, due to business expansion[67]. - Trade receivables increased to approximately RMB 2,216.7 million as of June 30, 2024, an increase of RMB 356.4 million from RMB 1,860.4 million as of December 31, 2023, attributed to higher sales revenue[68]. - The capital debt ratio as of June 30, 2024, was 5.1%, down from 8.7% as of December 31, 2023[75]. - The group's bank borrowings were approximately RMB 868.8 million as of June 30, 2024, a decrease from RMB 1,211.3 million as of December 31, 2023[66]. Sales and Market Performance - The company sold approximately 13.8 million tires in the first half of 2024, representing a year-on-year growth of 19.3%[16]. - Domestic dealer channel revenue was approximately RMB 1,244.6 million, a year-on-year increase of 10.3%, while international dealer channel revenue reached approximately RMB 3,511.9 million, up 28.8%[16]. - The company expanded its passenger car tire replacement channel, increasing the proportion of 17-inch and above products to 45.7%[23]. - The company is facing challenges in the commercial vehicle tire segment due to sluggish demand influenced by real estate investment and logistics issues, while passenger vehicle tire demand remains strong[14]. - The company is actively expanding its international market presence, launching new products in North America and Europe, including the "Hua Ren PLUS" ultra-high-performance tire[42]. Research and Development - The company has increased R&D investment in new materials, achieving 429 intellectual property rights, including 21 invention patents, enhancing tire safety, durability, and fuel economy[38]. - Research and development expenses decreased by approximately 14.2% from RMB 126.7 million to RMB 108.7 million, primarily due to the reversal of certain costs related to the 2021 equity incentive plan[56]. - The company launched the "H Heavy Duty Series" commercial tires, utilizing new technologies to enhance performance for complex transportation environments[20]. - The company developed 37 new overseas dealers during the reporting period, enhancing its international sales coverage[27]. Corporate Governance and Shareholder Information - The company has complied with the Corporate Governance Code during the reporting period[110]. - The controlling shareholder holds a direct and indirect beneficial ownership of 69.63% of the company's issued share capital[109]. - The company has not purchased, sold, or redeemed any of its listed securities during the six months ended June 30, 2024[115]. - The shareholder annual general meeting was successfully held on May 31, 2024, with board members and external auditors present[115]. - The shareholding structure indicates significant control by a few major shareholders, with over 69% held by the top two shareholders[119]. Sustainability and Community Engagement - The company has been recognized as a "green factory" by the Ministry of Industry and Information Technology of China, demonstrating its commitment to sustainable development and environmental protection[45]. - The company is participating in community development initiatives, including volunteer actions for local road improvements and donations to local schools in Thailand[45]. Challenges and Outlook - The company is facing a slight decrease in orders due to a sluggish domestic market and international shipping price impacts, with expectations of a challenging economic outlook for the second half of 2024[46]. - The company is currently evaluating the impact of new accounting standards that will take effect in the upcoming fiscal years, indicating a proactive approach to compliance[137].

Investment Rating - The report maintains a "Buy" rating for Prinx Chengshan (1809 HK) with a target price of HKD 13 54 [1] Core Views - Prinx Chengshan is expected to achieve a significant year-on-year growth in net profit attributable to the parent company of 130%-160% in H1 2024 reaching RMB 752-850 million [2] - The company's tire sales volume in H1 2024 reached 13 8 million units a 19% increase year-on-year with overseas market sales growing by 21% and passenger car tire sales by 25% [2] - The company plans to add 2 33 million units/year of semi-steel tire capacity in 2024 with new capacity expected to contribute to performance in the second half of the year [2] - The reduction in export tax rates for the company's Thailand base from 17 06% to 4 52% is expected to boost US orders and improve performance [2] - The report forecasts a 16 3% CAGR for the company's net profit attributable to the parent company from 2024 to 2026 [2] Financial Performance and Projections - The company's revenue is projected to grow from RMB 10 879 billion in 2024 to RMB 12 294 billion in 2026 with net profit attributable to the parent company increasing from RMB 1 314 billion to RMB 1 625 billion over the same period [3][9] - EPS is expected to rise from RMB 2 06 in 2024 to RMB 2 55 in 2026 with ROE maintaining above 20% [3][9] - The company's gross margin is forecasted to improve from 21 33% in 2023 to 24% in 2026 [8] Capacity and Market Demand - The company's semi-steel tire capacity utilization rate was 90 1% in Thailand and 96 8% in Shandong in 2023 [2] - Domestic rubber tire production and exports in H1 2024 increased by 10 6% and 10 2% respectively indicating strong demand [2] - The company's semi-steel tire capacity is expected to increase by 233 million units/year in 2024 with new capacity coming online in the second half of the year [2] Valuation and Peer Comparison - The report values Prinx Chengshan at 6x PE for 2024 based on its global layout and improved profitability [10] - Compared to peers such as Sentury Tire General Tire and Sailun Tire Prinx Chengshan's PE ratio is lower at 3 23x for 2024 [11] Business Segments and Assumptions - The report assumes a 2% annual price increase for all-steel tires and a 3% increase for semi-steel tires from 2024 to 2026 [7] - Semi-steel tire production is expected to grow from 19 38 million units in 2024 to 20 45 million units in 2026 [7] - All-steel tire production is projected to increase from 8 18 million units in 2024 to 8 93 million units in 2026 [7]

那么普林呢是我们公司这几年新打造的一个品牌那么他的这个slogan是为电动时代而生我们在中国市场推出的一些电动车轮胎都是在这个普林的品牌下面去进行一个营销 那么我们普林城商的这个公司体量呢按照23年全球商业企业75强的排行榜呢我们当时是以22年的营业收入来计呢我们当时是位列第28位那么希望在今年的这个情况呢会有一个改变因为23年我们的营业收入增长是领先了几个位置 那么在中国的这个橡胶工业百强企业中轮胎类呢我们当时二三年呢是位列第八位啊那么这个排名呢同样它是以二二年的营业收入来计那么如果是以二三年的营业收入来计呢我们有机会提前两到三个位置 这就是我们公司在行业中一个整体的一个体量那我们公司的发展历程的分为几个阶段那么公司的前身是荣城市橡胶厂那么他是在1976年是比较早开始发展这个轮胎轮胎这个行业在90年代的时候呢我们建立了国内首条的子午线轮胎生产线 在03年的时候,龙城市橡胶厂改制成为成山集团。那么在04年的时候,我们是中国当时的第三大轮胎制造商。 以及中国轮胎行业的一个三观网在05年到14年期间公司进入了一个合资期我们与美国库珀成立了一个库珀诚山山东轮胎有限公司那么我们是在14年的时候库珀提出退出当时诚山集团 ...

首先有请曹总各位下午好我是曹雪玉我是普林承商的投资者关系那么非常感谢今天下午大家有时间来我们一起交流一下我们普林承商的一个情况我今天的介绍是以我们公司2023年的年度业绩报告作为一个框架那么通过这样一个框架我们希望可以为各位介绍一下我们公司 我们的产品我们的市场以及我们的这个一些的这个这个不同的产品结构那我接下来就是首先介绍一下我们公司的概况 普利城山是一家拥有高增长网级的成熟轮胎制造商我们在山东和泰国有两大生产基地有三个产品品类主要是全钢胎半钢胎和斜焦胎那我们的产品是通过四个品牌销往全球市场首先是城山轮胎那么城山轮胎是我们最早的一个品牌那么它在卡克车司机这个领域有非常良好的口碑 那么我们为了在海外市场以及其他的一些细分市场推出我们的产品我们的奥通和复神就是这样的品是这样是通过奥通和复神这两个品牌来销往全球市场普林是我们新培育的一个品牌它主要侧重于一个高端的市场 在2023年的中国橡胶工业百强企业轮胎类的排名中我们以2022年的营业收入我们当时是位列中国轮胎的第八位那么我们根据2023年的营业收入我们目测应该我们是属于第五第六位是这样的一个体量 那普林城山的发展有它的这样一个历程那么它最早是在1976年在山东 ...

研究报告Research Report 24 May 2024 浦林成山 Prinx Chengshan Holdings (1809 HK) 2023 年净利润同比增长 162%，重点项目为公司增长奠定基础 2023 Net Profit +162% YoY & Key Projects Lay the Foundation for Company Growth [观Ta点bl聚e_焦yem Inevie1s] tment Focus [Tab维le_持Inf优o] 于大市Maintain OUTPERFORM (Please see APPENDIX 1 for English summary) 评级 优于大市OUTPERFORM  2023 年净利润同比增长 162%。2023 年公司实现营收人民币 99.5 亿元，同比增长 22%。公司实现净利润人民币 10.3 亿元， 现价 HK$9.08 目标价 HK$9.43 同比增长 162%。2023 年，公司坚定不移地实施全球化战略， 通过智能制造、技术创新与精益管理，持续增强核心竞争优 HTI ESG 4.0-4.0-4.0 势。得益于在乘用车轮胎领域 ...