Linglong Tyre(SH:601966) Xin Lang Cai Jing·2025-09-03 05:21Core Viewpoint - Shandong Linglong Tire Co., Ltd. reported a revenue increase of 13.80% in the first half of 2025, but faced a decline in net profit due to high raw material costs and increased competition in the tire industry [1][4]. Revenue and Profit Analysis - The company achieved a revenue of 11.812 billion yuan, marking a year-on-year growth of 13.80% [1][4]. - However, the net profit attributable to shareholders was 854 million yuan, reflecting a year-on-year decrease of 7.66% [1][4]. - The non-recurring net profit was 772 million yuan, with a more significant decline of 16.86% [4]. Cost and Expense Factors - The operating cost reached 9.981 billion yuan, increasing by 24.44%, which significantly outpaced revenue growth and squeezed profit margins [6]. - Raw material prices remained high, with natural rubber STR20 averaging 1,905 USD per ton in the first half of 2025, up 14.63% compared to the same period last year [6]. - Sales expenses surged to 416 million yuan, a year-on-year increase of 49.16%, primarily due to higher advertising and sales service costs [8]. Global Expansion Strategy - The company is accelerating its global layout by initiating an investment project in Brazil, planning to invest 1.19 billion USD (approximately 8.71 billion yuan) to build a tire factory [10]. - The Brazilian facility aims for an annual production capacity of 14.7 million tires, including 12 million semi-steel radial tires and 2.4 million all-steel radial tires [10]. - This move is strategic for entering the local automotive market and leveraging tariff agreements to access the broader Latin American replacement market [10][12]. Future Outlook - The company anticipates a potential easing of raw material pressures in the second half of the year, with natural rubber prices declining from their peak [11]. - Linglong Tire is exploring three main strategies to overcome industry challenges: nearshore manufacturing to avoid trade barriers, focusing on high-value-added products, and channel transformation to enhance distributor profitability [11][12].